When you have succeeded in your original market, it makes perfect sense to go to new markets, whether they are next door or in the other end of the world.  Localization is important in both cases though to varying degrees.  For instance, even in relatively homogeneous America, there are still vast differences between the two coasts, between people from the the Northeast and Texas and the Midwest.  As soon as you start talking a country in Latin America or Europe or Asia, you are talking of entirely different worlds.

Translation is not localization

Many executives make the mistake of equating translation with localization.  The two are entirely different.  A translation only allows a person to read a document written in a foreign language.  That's it.  On the other hand, when a person views a product (e.g. a software or a website) that is completely localized, she or he does not even think that the original exists some place else or originated elsewhere.  Some everyday examples are pizza (we think that it is as American as apple pie), belly-dancing (not many people think of the gypsies or middle eastern dancers when they think of belly-dancing), and fajitas (Most Mexicans don't know anything about fajitas).  

How to find a localization firm?

1. Identify your needs.  What is it that you really need.  Just a translation (that is fairly inexpensive) or localization as defined above (which can be several times more expensive).

2. Ask the vendors for samples of their work.  Better still, if possible, interview their customers in the target market and see if they perceive the final product as 'local'.

3. Look at their team.  For instance, there is a big difference in Hispanics who have been born and raised in the US (and speak fluent Spanish) versus those that still live in Latin America.  The former may not be the best people on the team.  In our opinion, the best team members are those that have been born and educated in the target country but have some education or work experience in the United States.  They are ideal for localization projects.