Some marketing, legal and human resources observations about the issue of applying different translation rates according to clients.
Translation agencies can often be tempted to offer different translation rates for their language services, depending on the characteristics of their clients. But what does that imply in terms of marketing? And with respect to the law ? And what about for the administration ?
Marketing: why offer different translation rates?
There are different reasons why a company may offer different prices to target clients: to increase turnover and profitability, reach new targets, regulate demand, manage costs, be more competitive, etc. These different rates may be fixed in particular according to: the product (offering options or versions of slightly different products), the distribution channel; the nature of the client (segments); the purchasing period (seasons). We might also want to mention that the basic price can be adjusted: lower for a shorter payment period or if the client pays for some specific functions; higher if, for example, additional benefits are added.
Legal rights : beware of discriminatory trade practices
The fight against discriminatory practices only concerns the relationship between professionals. The prohibition of such practices covers not only products but also services. Discriminations can be linked to the price or terms of sale (terms of payment, conditions of sale, terms of sale or purchase). A company is supposed to apply the same price to all of its clients. However, a company has the option to apply different rates to different « economic partners ». In addition, one has to be able to justify different conditions by a «real and effective compensation» such as the importance of the quantities sold, the services rendered by the clients or suppliers, a referencing discount or a trade cooperation.
Advantages of differential rates to clients
For example, when a translation agency in Paris offers different rates to certain clients, depending on the amount of work assigned, on the frequency of services or on shorter deadlines for payments, this gives the agency different benefits. This flexibility enables the translation agency to find bigger clients therefore giving it a higher turnover. It may also be a way, if shorter payment terms have been negotiated, to improve the services provided : with shorter collection time, the translation agency may be more attractive on the job market and hire professionals (mainly translators) that will enhance its human capital.
Disadvantages of differential rates according to clients
However, differential translation rates involve different types of difficulties. Starting with the legal issue mentioned above with which one should be particularly careful. A policy of varying prices also generates complications in terms of management: where one same price brings clarity and convenience, adaptable rates imply for the administrative staff but also for the marketing department an overload of work together with a risk of error which can be detrimental to the company.
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