The Key to Successful Sales in Japan: Understanding the Ringi Process and Ringisho

Introduction

For businesses looking to succeed in Japan, understanding the ringi process and the ringisho document is essential. Unlike Western decision-making models that emphasize individual authority and quick approvals, Japanese corporations rely on consensual decision-making. The ringisho serves as a formal document that enables proposals to gain approval through the consensual decision-making process. For businesses looking to enter the Japanese market, understanding the local processes is crucial.

What’s Inside the Ringisho?

The ringisho is a structured proposal document that facilitates internal decision-making in Japanese companies. A typical ringisho includes:

• Title and Proposal Summary – A concise explanation of the proposed action or project.
• Background and Purpose – Justification for the proposal, often including data, industry trends, or previous cases to support the proposal.
• Implementation Plan – Detailed steps for execution, including responsibilities and timelines. This also includes the feasibility of implementation and any onboarding and training required post-implementation.
• Expected Benefits and Risks – Analysis of both advantages and potential challenges.
• Financial Considerations – Budget requirements, return on investment expectations, and cost breakdown.
• Supporting Documents – Market research reports, competitor analysis, feasibility studies, and legal assessments. Case studies are also an important part of supporting documents.
• Approval Section – Lists the departments and managers required to review and approve the proposal, with hanko (personal seals) marking the document as it moves up the hierarchy.

All aspects are important, but Japanese buyers tend to put a strong emphasis on ROI. When selling, showing that a strong ROI is expected is key. This is why case studies are very important in the sales process (it’s the most requested sales collateral). Case studies give the buyers a concrete understanding of implementation, the expected benefits, and potential ROI (many case studies include ROI metrics). Understanding the components of the Ringisho should provide insight into the sales collateral that needs to be prepared. It also should provide insight on the messaging and key topics to touch on during the sales calls/process. Ultimately, the content needs to be localized for the buyers to properly evaluate the offerings.

The Ringi process is also why the “Download Documents” CTA is used in Japan. The document/company introduction deck (here’s a guide on what’s included in the company introduction deck) is evaluated and used as part of the Ringi process.

How the Ringi Process Affects Sales in Japan vs. Western Markets

For foreign companies entering the Japanese market, the ringi process presents unique challenges and opportunities. Understanding these differences is crucial for success.

One of the most notable impacts is the length of the sales cycle. In Japan, sales cycles tend to be longer since proposals must move through multiple levels of approval, whereas in the US and EU, decision-making is often centralized and/or top-down, allowing for faster approvals. Relationship-building is also a key factor in Japan, where trust and alignment with stakeholders are crucial. In contrast, Western markets place more emphasis on persuasive, results-driven pitches targeting key decision-makers.

The Ringi proposals require extensive supporting documents, including ROI projections, case studies, and internal evaluations. In the US and EU, due diligence is important, but the level of required documentation is often less extensive. It is important to understand and anticipate what documents would be required for the buyer’s internal Ringi process.

Conclusion

The ringi process and ringisho epitomize Japan’s business culture of consensual decision-making, significantly impacting how businesses operate and how sales are conducted. For companies entering Japan, understanding this process is key to successful sales. While the process fosters thoroughness, it can often delay the sales process. Knowing and anticipating the required information (ROI projections, case studies, etc.) can make sure that you’re on the same page when talking to potential buyers. If you’re looking to improve or expand your Japan sales efforts, book a free consultation here.