How to Hire a Commercial Director

Most businesses decide to appoint a Commercial Director for one of two reasons. Either revenue has stopped growing and they want someone to restart it, or revenue is growing and profit is not, and they have realised those are different problems. The second reason tends to produce far better appointments than the first, because it points at what a Commercial Director is actually for: making sure the business earns the right money, from the right customers, on terms it can live with.

This guide covers how to hire a Commercial Director in a UK business: when the role is justified, how it differs from a Sales Director, a Chief Commercial Officer and a COO, how to write a brief that attracts the right people, which candidate profiles suit which kinds of business, how to assess pricing, contract and P&L judgement at interview, how to structure the package, whether to hire on a permanent, interim or part-time basis, and what a good first 100 days looks like. It draws on the Commercial Director recruitment searches Exec Capital runs across UK mid-market and private equity-backed businesses.

When to hire a Commercial Director

The title is used loosely, so it helps to start with the problem rather than the job. A Commercial Director is justified when the business needs someone to own the quality of its revenue, not just the quantity. In practice, five situations make the case.

• Revenue is growing and margin is not. This is the clearest signal and the easiest to check in your own management accounts. It usually means discounting has become the default response to competitive pressure and nobody owns the pricing decision.
• Nobody can say which customers are profitable. If cost to serve has never been allocated by customer, product or channel, the business is being run on averages. Someone has to establish the real picture, and the answers are often uncomfortable.
• The founder is still the commercial brain. Common in owner-managed businesses. It works until the founder’s time is needed elsewhere, at which point pricing discipline, contract terms and key account relationships quietly drift.
• The business is preparing for investment or sale. Investors and acquirers look hard at revenue quality, customer concentration, contract terms and margin sustainability. Getting those defensible before a process starts is specialist work.
• The route to market is changing. Moving from direct sales to distributors, adding a marketplace channel, entering a new territory or shifting to recurring contracts all change the economics of revenue, and someone senior has to own that change.

If none of those apply and the real requirement is simply more selling of a proposition whose price and terms are already settled, a Sales Director is usually the more proportionate appointment. Our Sales Director recruitment practice handles that brief, and it is worth being honest at the outset about which one you need. Appointing a Commercial Director to do a Sales Director’s job wastes the salary; appointing a Sales Director and calling them Commercial Director leaves the margin problem exactly where it was.

Timing also matters. Businesses often wait until margin has eroded for two or three years before acting, by which point the customer base has been trained to expect discounts and the cost of correction is higher. The earlier the role is in place, the less unwinding it has to do.

What the role covers

A Commercial Director owns how the business makes money. That is broader than sales and narrower than general management. In most UK businesses the role covers five areas:

• Pricing. Price setting, discount authority, approval levels and exception reporting. A business where salespeople discount at their own discretion does not have a pricing strategy, whatever the price list says.
• Margin. Understanding cost to serve by customer, product line and channel, and acting on it. This is where strong Commercial Directors spend a disproportionate amount of time, and why they work closely with the Finance Director.
• Commercial terms. Contracts, payment terms, service levels, liability caps and renewal mechanics. Revenue booked on terms the business cannot service profitably is a liability dressed as an asset.
• Channel and route to market. Direct, partner, distributor, marketplace, and the economics of each. Businesses often find a channel is loss-making only when someone finally allocates cost to it properly.
• The sales function. In most structures the sales team reports into the Commercial Director, though in larger businesses the two roles can sit side by side.

A full breakdown of duties, reporting lines and person specification is in our Commercial Director job description. The more useful exercise for most boards is working out where the role’s boundaries sit against the neighbouring titles.

Commercial Director vs Sales Director

A Sales Director is measured on top line: pipeline, conversion, bookings and the performance of the sales team. A Commercial Director is measured on profitable revenue, and will turn down business a Sales Director would chase. The simplest test is how you would describe the problem. “We are not selling enough” points to a Sales Director. “We are selling plenty and making very little” points to a Commercial Director.

Commercial Director vs Chief Commercial Officer

The difference is mainly one of scale and seat. A Chief Commercial Officer usually sits on the executive committee of a larger or more complex business and owns commercial strategy across several divisions, territories or product lines, often with sales, marketing, pricing and partnerships reporting in. A Commercial Director more often runs the commercial function of a single business or division and is closer to the detail of pricing and contracts. In a £20m owner-managed company the two titles may describe the same job; in a multi-country group they do not. Our guide on how to hire a Chief Commercial Officer covers the executive-committee version of the role.

Commercial Director vs COO

A COO owns how the business delivers: operations, supply chain, service delivery, process and often technology. A Commercial Director owns what the business sells, to whom, at what price and on what terms. The two roles meet at cost to serve and service levels, which is exactly where friction arises if the boundary is left vague. A Commercial Director who agrees bespoke service levels to win a contract creates cost the COO then has to absorb. Strong businesses agree in advance who signs off non-standard terms. If what you actually need is someone to fix delivery rather than revenue, a COO is the more relevant hire.

Group Commercial Director

Where a business runs several trading companies, the role changes character. A Group Commercial Director rarely manages sales teams directly. Instead they set the pricing framework and discount authority each subsidiary works within, drive cross-selling between businesses, and often consolidate procurement. The job relies on influence without direct authority, which is a different skill from running one commercial function, and it should be tested specifically rather than assumed from seniority.

Writing the brief

A weak brief lists duties. A strong one describes the commercial problem the appointee is being hired to solve, the authority they will have and the constraints they will work within. The right candidates use that to self-select; the wrong ones rule themselves out early, which saves months.

• State the problem, not the duties. “Gross margin has fallen over three years and we cannot fully explain why” attracts a different calibre of candidate than a list of responsibilities.
• Be explicit about the sales team. Does the role manage it, or work alongside a Sales Director? This single point changes the candidate profile completely and is the most common ambiguity in commercial briefs.
• Name the pricing authority. If the founder or CEO will continue to approve every significant deal, say so. Strong candidates will decline, which is better than discovering it six months in.
• Describe the data. Can the business currently report margin by customer and product? If not, the first year will involve building that capability, and the brief should say so.
• Set out the reporting line and board position. Reporting to the CEO and reporting to a Managing Director of one division are different jobs. Whether the appointee will be a registered director should also be settled before offer.
• Define success at 12 and 24 months. For example: a pricing governance framework in place, unprofitable accounts repriced or exited, a defined gross margin improvement, renewal terms standardised.

On the board question, the job title alone does not make someone a statutory director. But section 250 of the Companies Act 2006 defines a director as any person occupying the position of director, by whatever name called, and a formally appointed director takes on the general duties in the Act, including the duty under section 172 to promote the success of the company. Candidates at this level will ask, and the answer affects both the package and the indemnity cover they expect.

Candidate profiles by business type

Commercial Directors come from four main backgrounds: sales leaders who have broadened into pricing and margin; commercial finance professionals who moved closer to customers; category and product managers, particularly in retail, FMCG and manufacturing; and pricing or commercial excellence consultants. Each has a predictable strength and a predictable gap. Which one fits depends heavily on the kind of business doing the hiring.

Owner-managed businesses

The typical brief is to take commercial decisions off the founder’s desk without losing the customer relationships the founder built. The best fit is usually a hands-on operator who has worked in a business of similar size, is comfortable without a large support team, and can build pricing and reporting discipline from scratch. Candidates from large corporates often struggle here, not for lack of ability but because they are used to analysts, pricing tools and a defined process that does not yet exist.

Private equity-backed businesses

Here the role is tied to the investment case. Sponsors want evidence of margin improvement, pricing power and revenue quality that will stand up at exit. Candidates who have worked through at least one investment cycle, understand how a buyer will diligence the revenue line and can report against a value creation plan are at a clear advantage. Equity often forms part of the package, which changes the conversation about base pay. These appointments usually involve the sponsor closely in the brief and at final interview.

Manufacturing and distribution

Margin is usually driven by product mix, raw material pass-through, rebates and customer-specific terms. Candidates with category management or commercial finance backgrounds often outperform pure sales leaders, because they are comfortable with cost models, price-volume-mix analysis and supplier negotiation. Experience of renegotiating long-standing customer agreements without losing the account is particularly valuable.

B2B services and technology

Revenue tends to be contract-based and recurring, so the commercial levers are contract structure, renewal pricing, scope control and utilisation rather than list price. Look for candidates who have owned renewals and contract terms, not just new business, and who can work with delivery leadership to stop scope creep eroding margin.

Regulated and public-facing sectors

In sectors with consumer protection or procurement rules, the Commercial Director has to work within constraints a pure commercial operator may not be used to. Pricing decisions also carry legal risk in any sector: competitors discussing or coordinating prices is prohibited under the Competition Act 1998, and the Competition and Markets Authority’s guide to competing fairly is a sensible reference point. A strong candidate will understand where the lines sit on information sharing at trade bodies and with distributors.

Assessment: pricing, contracts and P&L ownership

Commercial candidates interview well almost by definition. The task is to get past presentation and test whether they have actually owned the economics of a business. Three areas do most of the work.

Pricing

• “How were pricing decisions made in your last business, and what did you change?” Look for governance: approval levels, discount authority, exception reporting. Talk of ‘commercial judgement’ with no framework behind it usually means pricing was ad hoc.
• “Tell me about a price increase you implemented. How did you decide the level, and what happened to volume?” Strong answers include how customers were segmented, how the message was handled and what churn followed.
• “Tell me about a customer you exited or repriced because they were unprofitable.” A candidate who has never wanted to exit a customer relationship has either had unusually good customers or has not been looking at profitability.

Contracts

• “Describe a contract you renegotiated. What did you concede?” Everyone concedes something. Candidates who describe only wins are either inexperienced or presenting rather than answering.
• “Which contract terms do you look at first when you join a business?” Good answers cover payment terms, indexation, liability, termination and renewal mechanics, and explain why each matters to cash and margin.
• “How do you stop the sales team agreeing non-standard terms to close a deal?” This tests whether they have built a deal desk or approval process, not just policed one.

P&L ownership

• “Talk me through the gross margin of the last business you were responsible for. What moved it, and what did you personally change?” This is often the decisive question. Genuine Commercial Directors answer in margin terms without notes. Sales leaders in commercial clothing drift back to revenue and team size.
• “Where would you expect to find margin in a business like ours in the first 90 days?” Strong candidates name two or three specific places to look and explain why. Weaker ones describe a generic process.
• “What did your Finance Director think of you?” Said lightly, it is a serious question. The working relationship with finance is central to the role.

A practical exercise works well at second stage: give shortlisted candidates an anonymised extract of customer and product data and ask for their view on where the margin issues sit. Pair that with references that test attribution, asking referees what the candidate personally changed rather than simply confirming dates of employment.

Structuring the package

Commercial Director packages usually carry a larger variable element than most director-level roles, and the structure matters as much as the headline number.

• Do not bonus on revenue alone. Paying a Commercial Director on top line rewards exactly the behaviour you appointed them to stop. Gross profit, contribution or gross margin are more appropriate measures, ideally with a revenue gate so margin is not improved simply by shrinking the business.
• Look beyond one year. Pricing discipline and contract renegotiation take longer than a single bonus year. Annual-only incentives push candidates toward quick wins that unwind.
• Expect sector and ownership to move the base. Manufacturing, distribution, technology and professional services pay differently, and a candidate offered meaningful equity in a PE-backed business may accept a lower base than in a comparable corporate role.
• Settle the practical terms early. Notice periods at this level are often three months and sometimes longer, and restrictive covenants on customers and staff are common. Find out what the preferred candidate is bound by before you reach offer.

For current benchmarks, see our director salary guide, which is updated as the market moves. We would rather point you to sourced benchmarks than quote a figure here that may not reflect your sector, region or ownership structure.

Permanent, interim or part-time

Not every commercial problem needs a full-time permanent hire on day one, and choosing the wrong format is a common and avoidable mistake.

Permanent is right when the business needs ongoing commercial leadership, the role will manage a team, and the board wants someone who will own outcomes over several years. It is the most common format and the one our Commercial Director search is usually built around. A permanent search typically runs for several months from agreed brief to start date, with notice periods accounting for much of that.

Interim suits situations with a defined objective and a deadline: a mid-year departure, a pricing reset ahead of a sale, a margin recovery programme, or integrating the commercial functions of an acquisition. An interim Commercial Director is typically full-time for a fixed period and can usually start far faster than a permanent hire, because experienced interims are not working through long notice periods. If the interim is engaged through their own company, the off-payroll working rules (IR35) need to be considered at the outset; for medium and large clients, the client is responsible for deciding the worker’s employment status.

Part-time or fractional fits businesses whose commercial problem is structural rather than day-to-day: setting up pricing governance, building customer profitability reporting, reworking standard terms, or coaching a capable sales lead into a broader role. One or two days a week from an experienced operator often achieves more than a full-time hire who is underemployed once the structure is in place. Our part-time Commercial Director recruitment covers this model.

These formats are not mutually exclusive. A common pattern is an interim or part-time Commercial Director who builds the framework, followed by a permanent hire into a role that is now clearly defined, with the earlier appointee often helping to assess the shortlist.

The first 100 days

Agreeing the first 100 days before the appointee starts protects both sides. It sets expectations, gives the board something to review against, and stops a new Commercial Director being pulled straight into firefighting individual deals.

Days 1 to 30: understand the economics

• Meet the top customers by revenue and by margin, which are rarely the same list.
• Establish what margin data exists by customer, product and channel, and what does not.
• Review the main contracts, standard terms and current discount practice.
• Agree the working relationship with the Finance Director and the COO, including who signs off non-standard terms.

Days 31 to 60: diagnose and prioritise

• Produce a first customer profitability view, even if it relies on estimates.
• Identify the two or three largest sources of margin leakage.
• Put interim pricing and discount approval levels in place.
• Assess the sales team’s structure, incentives and capability against the commercial plan.

Days 61 to 100: act and set the plan

• Begin repricing or renegotiating the clearest problem accounts.
• Present a commercial plan to the board with measurable targets for the next 12 months.
• Align sales incentives with margin rather than volume alone.
• Set up regular reporting so the board can track progress without having to ask.

Boards should expect early findings rather than early miracles. A good Commercial Director will usually surface uncomfortable facts in the first quarter, such as large accounts that lose money or terms nobody remembers agreeing. That is the role working, not failing.

Mistakes to avoid

• Hiring a Sales Director under a bigger title. Revenue rises, margin does not, and the search is repeated 18 months later.
• Keeping pricing authority with the founder. The role cannot function without it. If you are not ready to release it, hire a Sales Director and be clear why.
• Bonusing on revenue. The most common structural error in commercial packages.
• Interviewing on presence. Weight evidence of margin improvement over the impression a candidate makes in the room.
• Leaving the sales reporting line unresolved. Ambiguity produces two people running one function badly, and it is avoidable at brief stage.

Frequently asked questions

What is the difference between a Commercial Director and a Sales Director?

A Sales Director is measured on revenue; a Commercial Director on profitable revenue. The Commercial Director owns pricing, margin and contract terms as well as, usually, the sales team, and will decline business a Sales Director would pursue.

Is a Commercial Director the same as a Chief Commercial Officer?

In smaller businesses the titles can describe the same job. In larger or multi-division businesses, a Chief Commercial Officer usually sits on the executive committee with group-wide commercial strategy, while a Commercial Director runs the commercial function of one business or division.

Does a Commercial Director manage the sales team?

Usually, yes. In larger businesses a Sales Director may report into the Commercial Director or work alongside them. Settle this in the brief, because it changes the candidate profile substantially.

How long does it take to hire a Commercial Director?

It depends on the brief and the candidate’s notice period. Notice periods of three months are common at this level, so a permanent appointment usually takes several months from brief to start. An interim can normally start much sooner.

Can a Commercial Director work part-time?

Yes. A part-time or fractional Commercial Director working one or two days a week suits businesses whose problem is structural, such as pricing governance, margin analysis or contract terms, rather than day-to-day management of a large sales team.