Why Are LSPs Moving Away from Per-Word Pricing?

Why Are LSPs Moving Away from Per-Word Pricing?

1. Market Changes

• Technology (AI/MT) has automated much of the translation process.

  • With tools like MT, CAT, and GenAI, large volumes of text can be translated quickly, often with less human effort for straightforward content.

  • As a result, per-word prices have dropped sharply—but clients still expect high value and service.

• Clients increasingly need “bundled” solutions, not just raw translation.

  • Projects often include DTP, QA, SEO adaptation, transcreation, engineering, or API integrations—work not measured by word count.
    
    

2. Value Is Not Always Linked to Volume

• Some content is simple, some is highly complex.

  • Per-word rates don’t reflect the expertise or risk involved in legal, medical, or regulated sectors.

• Clients are interested in outcomes:

  • Website launch, product rollout, regulatory compliance—not just how many words were handled.
    
    

3. Competitive & Profitability Pressures

• Downward price pressure:

  • Per-word competition leads to a “race to the bottom,” shrinking margins for LSPs, especially with technology reducing human touch.
    
    

• Project complexity has increased:

  • Modern localization includes project management, consulting, ongoing content streams, and tech integration. These services require time and expertise not captured by per-word billing.
    
    

4. Service Model Innovation

• Alternative pricing models include:

  • Per-project: Flat rates for an entire project regardless of word count.

  • Subscription/retainer: Monthly fees for a mix of translation, updates, and support (good for ongoing content or SaaS clients).

  • Hourly or outcome-based: Especially for consulting, transcreation, copywriting, or complex workflows.

  • Service bundles: “All-in-one” packages including translation, review, DTP, QA, etc.
    
    

5. Client Expectations and Modern Content

• More clients need ongoing updates (continuous localization) where “per word” is hard to track or irrelevant.

• Some services (like multimedia, transcreation, QA, content engineering) are impossible or unfair to price by word.
  
  

Summary Statement

Per-word pricing is becoming outdated because it doesn’t reflect the true value, effort, or range of services modern LSPs provide like Alafranga Language Solutions
Today, clients want packaged solutions, faster turnaround, and strategic consulting—not just raw word counts. Moving to project-based, subscription, or value-based pricing aligns the our business model with real-world client needs and the complexity of modern localization.

Prepared by Alafranga Team