How to Hire a Commercial Director

Businesses appoint a Commercial Director for one of two reasons. Either revenue has stopped growing and they want someone to fix it, or revenue is growing and margin is not, and they have worked out those are different problems. The second reason produces far better appointments than the first.

This guide sets out what a Commercial Director genuinely owns, how the role differs from a Sales Director or CRO, when a business is ready for one, where the candidates come from and how to assess them. It is written by Exec Capital, who run these searches across the UK.

What a Commercial Director actually owns

A Commercial Director owns how the business makes money. That is broader than sales and narrower than general management, and it covers five things.

Pricing. The single most under-managed lever in most UK mid-market businesses. Who sets prices, who may discount, by how much and with what approval. A business where sales people discount at their own discretion has no pricing strategy, whatever the price list says.

Margin. Understanding cost to serve by customer and by product line, and acting on it. This is where the strongest Commercial Directors spend disproportionate time, and it is why the best of them work unusually closely with the Finance Director.

Commercial terms. Contracts, payment terms, service levels, liability caps, renewal mechanics. Revenue booked on terms the business cannot service profitably is a liability presented as an asset.

Channel and route to market. Direct, partner, distributor, marketplace — and the economics of each. Businesses frequently discover their partner 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. Not always — in larger businesses the two roles can sit alongside each other — but the default is that commercial owns sales.

Commercial Director, Sales Director or CRO?

These three titles are used interchangeably and they should not be. Appointing the wrong one is expensive and the error is only visible about nine months later.

The practical test: if you can articulate the problem as “we are not selling enough”, you probably need a Sales Director. If it is “we are selling plenty and making nothing”, that is a Commercial Director. If it is “sales and marketing blame each other”, that is a CRO.

The Group Commercial Director

Where a business operates several trading companies, the role changes character rather than simply scaling. Three things distinguish it.

Consistency over control. They rarely manage sales teams directly. Instead they set the pricing framework, discount authority levels and commercial standards each business operates within, and intervene where a subsidiary is discounting its way to a poor year.

Cross-selling. The commercial case for a group usually rests on selling more than one company’s products to the same customer. Making that happen — against the entirely rational resistance of subsidiary MDs protecting their own numbers — is often the central task and the hardest.

Procurement. In many groups the role covers the buy side too, consolidating spend across businesses to improve terms.

The role demands influence without direct authority, which is a materially different skill from running a single commercial function. Candidates who have only operated in one business frequently struggle, and it should be tested specifically at interview rather than assumed from seniority.

Is your business ready for one?

Four conditions suggest yes.

Revenue is growing and margin is not. The clearest signal, and the easiest to verify from your own management accounts. It almost always means discounting has become the default answer to competitive pressure and nobody owns the pricing decision.

Nobody can tell you which customers are profitable. If cost to serve has never been allocated, you are running a business on gross assumptions. A Commercial Director’s first substantive act is usually to establish this, and the findings are frequently uncomfortable.

The founder is still the commercial brain. Common in owner-managed businesses between £5m and £25m. It works until the founder’s attention is needed elsewhere, at which point commercial discipline quietly degrades.

You are preparing for investment or exit. Buyers and sponsors scrutinise revenue quality, customer concentration, contract terms and margin sustainability. Getting those defensible is a specific expert task, and it surfaces early in private equity processes.

Where none of these apply and the requirement is simply more selling, a Sales Director is the more proportionate and cheaper appointment.

Where the candidates come from

Four pools, each with a predictable strength and gap.

Sales leaders who have broadened. The largest pool. Strong on team leadership, customer relationships and closing. The gap is analytical — test their comfort with margin analysis specifically, because many have never owned it.

Finance or commercial finance backgrounds. Analysts and finance managers who moved into commercial roles. Strong on pricing, margin and contract economics. The gap is usually people leadership and the willingness to sit in front of a difficult customer.

Category or product management. Common in retail, FMCG and manufacturing. Strong on portfolio economics, promotional planning and supplier negotiation. Frequently excellent, and consistently overlooked because the job titles do not match.

Consulting. Pricing and commercial excellence practices produce strong analytical candidates. The gap is operational — they have recommended change more often than they have delivered it against resistance.

Writing the brief

State the commercial problem, not the duties. “Gross margin has fallen four points in two years and we cannot explain why” attracts a different calibre of candidate than a responsibilities list, and it lets them self-select accurately.

Be explicit about the sales team. Does the role manage them, 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 will continue approving every significant deal, say so. Strong candidates will decline, which saves everybody several months.

Confirm the board position. Whether the appointee will be a registered director carries statutory duties under section 172 of the Companies Act 2006 and personal exposure. The office of director is defined at section 250 and arises from formal appointment and filing at Companies House. Settle it before offer.

Assessment: the questions that separate candidates

“Talk me through the gross margin of the last business you were responsible for. What moved it and what did you personally change?”

The decisive question. Genuine Commercial Directors answer in margin terms without notes and identify specific interventions. Sales leaders in commercial clothing move quickly back to revenue and to the team they built.

“Tell me about a customer you fired, or wanted to.”

Commercial discipline means being willing to decline revenue. A candidate who has never wanted to exit a customer relationship has either had unusually good customers or has not been looking at profitability.

“How did pricing decisions get made in your last business, and what did you change about that?”

Look for governance: approval levels, discount authority, exception reporting. Answers about “commercial judgement” without a framework behind them usually mean pricing was ad hoc.

“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.

“Where would you expect to find margin in a business like ours in the first ninety days?”

Tests whether they have prepared and whether they think in hypotheses. Strong candidates name two or three specific places to look and explain why. Weak ones describe a process for finding out.

What it costs

Commercial Director packages carry a higher variable component than most director-tier roles, and the structure matters as much as the number.

Avoid pure revenue bonuses. Paying a Commercial Director on top line rewards exactly the behaviour you appointed them to stop. Margin, gross profit or contribution are the appropriate measures.

Weight toward multi-year outcomes where possible. Pricing discipline and contract renegotiation take longer than a bonus year, and annual-only incentives push candidates toward quick wins that unwind.

Sector moves the base. Manufacturing, distribution and professional services sit differently. Ownership matters too — a PE-backed Commercial Director with meaningful equity may accept a lower base than a comparable corporate appointment.

Current benchmarks are in our directors’ salary guide. Broader labour market context is published by the Office for National Statistics.

How long the search takes

Allow ten to sixteen weeks from agreed brief to start date for a permanent appointment.

Weeks one to two. Brief, specification and search. The pool is wide but the genuinely commercial candidates within it are not, so screening matters more here than in most director searches.

Weeks three to five. Shortlist and first interviews. Exec Capital typically delivers a shortlist within three to seven working days of the brief being agreed.

Weeks six to eight. Second stage, ideally including a commercial exercise on your own anonymised data, and references that test attribution rather than confirm employment.

Weeks nine to sixteen. Offer and notice. Three months is common at this level, occasionally six in senior commercial roles with restrictive covenants attached.

Where the requirement is urgent — a departure mid-year, or a transaction timetable — a interim appointment can hold the position, and a fractional Commercial Director suits businesses that need the judgement two days a week rather than the full cost.

Five mistakes to avoid

Hiring a Sales Director and calling them Commercial Director. The title inflation is common and the consequence is predictable: revenue rises, margin does not, and eighteen months later you run the search again.

Keeping pricing authority with the founder. The role cannot function without it. If you are not ready to release it, appoint a Sales Director instead and be honest about why.

Bonusing on revenue. Covered above, and worth repeating because it is the commonest structural error in commercial packages.

Interviewing on presence. Commercial candidates interview well by professional necessity. Weight the margin evidence over the impression.

Not resolving the sales reporting line. Ambiguity here produces two people running one function badly, and it is entirely 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 sales, and will decline business a Sales Director would pursue.

Does a Commercial Director manage the sales team?

Usually yes. In larger businesses the two roles can sit alongside each other with the Sales Director reporting in, and in some structures they operate in parallel. It should be settled explicitly in the brief, because it changes the candidate profile substantially.

What does a Group Commercial Director do?

They hold commercial responsibility across several operating businesses — setting pricing frameworks and approval thresholds group-wide, driving cross-selling between subsidiaries and often consolidating procurement. The role relies on influence rather than direct line management.

When should a business hire a Commercial Director?

Most commonly between £5m and £50m of revenue, when margin is not keeping pace with growth, when nobody can identify which customers are profitable, or when preparing for investment or sale. Below that, a Sales Director or the founder usually suffices.

Can a Commercial Director work part-time?

Yes. A fractional Commercial Director working one or two days a week suits businesses whose problem is structural — pricing, margin analysis, contract terms — rather than requiring daily management of a large sales team.

Related guides and services