Commercial Policy

Commercial Policy

End-to-end commercial-policy authoring and governance: defining the rules that govern what sales can offer, what triggers approval, and what's prohibited. Pairs with our deal-desk (operational enforcement) and pricing-strategy (price-setting) skills — this is the policy that those execute against.

A good commercial policy:

• Makes deal-desk faster (fewer ambiguous cases)
• Makes sales reps more autonomous (clearer authority)
• Makes legal reviews lighter (most cases already covered)
• Reduces concession drift over time
• Provides audit-ready governance documentation

When to use this skill

What commercial policy covers

Standard scope:

What it doesn't cover:

• Day-to-day pricing decisions (that's pricing strategy)
• Per-deal approval mechanics (that's deal-desk operations)
• Sales targets / quota (that's compensation policy)
• Customer success / churn-prevention tactics

Commercial policy charter (template)

The foundational document. Every company that does $5M+ ARR needs one. Use this template:

markdownCopy code
# Commercial Policy Charter

## Purpose
This Commercial Policy defines the rules that govern commercial terms
offered to customers. It is binding on all customer-facing functions
(Sales, Customer Success, Partner / Channel) and is enforced by Deal Desk.

## Scope
Applies to:
- All new customer agreements
- All renewals (with material change)
- All partner-mediated deals
- All custom / non-standard agreements

Does not apply to:
- Self-serve / PLG transactions per standard published terms
- Auto-renewals at standard terms

## Owners and Approvers
- Policy owner: CRO + CFO + General Counsel (jointly)
- Operational enforcement: Deal Desk
- Updates: quarterly review by policy owners
- Material changes: board awareness

## Pricing Policy

### Standard pricing
- All new customers offered at published list pricing
- Published price is canonical; deviations require approval per matrix

### Discount approval matrix
[Per the deal-desk approval matrix — see business-growth/deal-desk]

### Maximum allowed discount
- Standard maximum: 50%
- Beyond 50%: CEO + Board awareness required
- Discount > 60%: only with explicit strategic-rationale documented and CEO sign-off

### Most Favored Nation (MFN)
- Not granted by default
- Granted only with: strategic-tier customer + CRO + CFO + GC approval
- Always scoped narrowly: same product, same volume, same term length, same geography
- Disclosure-only (never automatic price-match)

### Rebates
- Performance-based rebates allowed per partner-program tier
- Customer-tier rebates: discouraged; if granted, time-bounded and explicit

## Contract Policy

### Standard term
- 12-month contract with annual prepay
- Auto-renew unless 90-day notice

### Term flexibility
- < 12 months: requires Director approval
- 24-36 months: Director approval
- > 36 months: VP Sales approval
- Multi-year discounts: per discount matrix

### Payment terms
- Standard: Net 30, annual prepay
- Net 45-60: Director approval
- Net 90+: CFO approval
- Custom milestone-based: CFO approval; revenue recognition impact reviewed

### Renewal
- Standard: auto-renew, same terms, same price (or per published renewal pricing)
- Renewal expansion > 20%: deal-desk review
- Renewal contraction > 10%: deal-desk review + customer success consultation

### Termination
- Standard: termination for convenience requires 90-day notice
- Termination for cause: 30-day cure period
- Customer-requested termination flexibility: Director approval
- Mid-term termination rights: VP Sales approval

## Legal Policy

### MSA modifications
- Pre-approved modifications: tracked list in approved-modifications appendix
- Custom modifications: General Counsel approval required
- Customer-supplied MSA: full GC review; default to push back to our MSA

### Liability cap
- Standard: 1x annual fees
- 2x annual fees: GC + CFO approval
- > 2x annual fees: CEO sign-off
- Carve-outs: IP infringement, gross negligence, willful misconduct — always uncapped

### Indemnification
- Standard mutual indemnification per template
- Customer-favorable indemnification: GC approval
- Defense / settlement control: vendor by default; customer-controlled needs CEO

### Jurisdiction and governing law
- Standard: vendor's jurisdiction
- Customer jurisdiction: GC approval
- Arbitration vs litigation: per template; deviations need GC

### IP
- Standard: each party retains pre-existing; joint inventions per default
- Customer-favorable IP terms: GC approval
- Source code escrow: only for OEM / strategic; never standard customer

## Operational Policy

### SLA tiers
- Standard published SLA (99.5%)
- Enhanced SLA (99.9%): per published pricing
- Custom SLA: Customer Success + Engineering approval; pricing premium per agreement
- Custom SLA with penalties: CRO + CCO + Engineering approval

### Security commitments
- Standard SOC 2 / ISO 27001 commitments per template
- Custom security: CISO + GC approval
- Customer audit rights: GC approval (limited to annual, with notice, third-party auditor)

### Dedicated infrastructure
- Not standard; available only with CTO + GC approval
- Premium pricing required

## Customer Commitments

### Reference / case study requests
- Standard: requested but not required
- Discounted deals (> 15%): case study or reference required as condition
- Strategic logos: explicit case study + press release commitment

## Channel Policy

### Partner-mediated deals
- Per Partner Agreement; discount per tier
- Deal registration governs conflict
- Direct rep authority same as direct deals on partner-led opportunities

## Special Terms

### Performance-based payment
- Payment-on-acceptance / acceptance criteria: CFO + GC approval
- Milestone payments: CFO approval

### Ramp deals
- ≤ 3 months: Sales Manager
- 3-12 months: Director
- > 12 months: VP Sales

### Source code escrow (for customer)
- Not standard; available only with CTO + GC approval

## Documentation Requirements

Every non-standard deal documented per Deal Desk packet template:
- Deviation explicitly listed
- Justification documented
- Approver identified
- Customer commitments (if any) explicit
- Expiration / conditions clear

## Annual Review

This policy is reviewed annually by CRO + CFO + GC.
Material changes communicated to sales with training.

## Effective Date
<date>
## Last Updated
<date>
## Approved By
- CRO: <signature>
- CFO: <signature>
- GC: <signature>
- Board (acknowledgement): <date>

See references/commercial-policy-charter.md for the full annotated charter with notes on each section's typical contentious issues.

Discount and terms policy details

See references/discount-and-terms-policy.md for deeper guidance on:

• Discount-percentage policy by ACV bracket
• MFN clause design (when to allow, how to scope)
• Performance-based rebate structures
• Multi-year discount mechanics
• Payment-term flexibility and revenue-recognition implications
• Renewal pricing policy (escalators, holds, contraction)

Contract and commercial guardrails

See references/contract-and-commercial-guardrails.md for deeper guidance on:

• Acceptable MSA modifications (a list-based, not case-by-case approach)
• Liability cap negotiation
• Termination rights design
• IP and joint-development clauses
• Customer audit rights
• Cross-jurisdictional terms (EU vs US vs APAC)

Clarify First

Before generating the policy, confirm these inputs. If any is unknown or vague, ASK — do not assume:

• Company stage + ARR scale — drives whether a full charter is warranted and how tight thresholds should be
• Approver structure — who owns the policy and sits in the chain (CRO/CFO/GC, VP Sales, Director) (populates Owners/Approvers and every approval line)
• Region / jurisdiction — US / EU / APAC (changes payment norms, governing law, and triggers a regional overlay)
• Max discount + liability risk appetite — the discount ceiling and liability-cap tolerance (drives the Pricing and Legal policy sections)

Stop rule: ask only the 2-3 that most change the output. If the user says "just draft it," proceed and list your assumptions at the top of the policy.

End-to-end workflows

Workflow: Author commercial policy from scratch

1. Assemble policy committee — CRO + CFO + GC sponsors + Deal Desk Lead + Sales Operations
2. Inventory current deals — what terms have been offered? What's been ad-hoc?
3. Identify policy gaps — areas where ad-hoc behavior is hurting (concession drift, customer surprises)
4. Draft charter using template; one section per domain
5. Internal review — Sales VP, Eng VP, CISO, Customer Success VP, Finance for revenue recognition
6. Pilot with sales managers for 30 days — collect feedback
7. Final approval — CRO + CFO + GC sign-off; board awareness
8. Sales training — workshop + recorded session + quick-reference cards
9. Publish to sales wiki / partner portal / customer-facing communications team
10. Quarterly review thereafter

Workflow: Refresh existing policy (annual)

1. Pull deal data for past 12 months: discount distribution, terms deviations, approvals
2. Identify drift — what's the deviation rate by policy category?
3. Survey sales managers — what's working / what's blocking
4. Survey customers — what terms have been requested but declined?
5. Identify market shifts — competitive landscape, customer expectations
6. Draft amendments — specific policy changes with rationale
7. Approve with CRO + CFO + GC
8. Communicate changes to sales with training
9. Update charter + effective date

Workflow: Audit deal compliance

1. Export deals from CRM for the period
2. Run compliance checker — scripts/policy_compliance_checker.py --deals deals.csv --policy policy.yaml
3. Review non-compliant deals — investigate each: was the deviation approved? was it documented?
4. Categorize:
   • Compliant with approved deviation: OK
   • Non-compliant unapproved: investigate; corrective action
   • Compliant but suggests policy gap: amend policy
5. Report to policy committee; track corrective actions

Workflow: Generate region-specific policy

1. Identify region-specific requirements — currency, jurisdiction, payment norms, regulatory
2. Run scripts/commercial_policy_generator.py --base policy.yaml --region <region> to get base + regional overlay
3. Tailor further with local team (regional VP Sales, regional GC, regional CFO)
4. Approve through standard governance
5. Communicate to regional sales

Anti-patterns

• Policy without enforcement. Written policy + ad-hoc execution = policy is theater.
• Policy that's never updated. Markets shift; competitive landscape changes; policy goes stale.
• Policy with no compliance audit. Without measurement, you can't tell if policy is followed.
• Policy too restrictive. When sales bypasses constantly, the policy is wrong; tighten or loosen.
• Policy too lax. When everyone "complies" but margin still erodes, policy doesn't constrain enough.
• Policy authored without sales input. Reps see it as imposed; comply minimally.
• Policy with no training. Reps don't know what they can offer; default to over-asking deal desk.
• Policy that's a contract appendix. Buried in legal docs; never read.
• Same policy across regions when market conditions differ substantially.
• Policy reviewed only after a customer complaint. Reactive only.

Tooling outputs

All scripts: stdlib only, argparse CLI, JSON or markdown output.

References

• commercial-policy-charter.md — full annotated charter with notes on each section
• discount-and-terms-policy.md — discount, MFN, rebate, payment-terms policy depth
• contract-and-commercial-guardrails.md — MSA modifications, liability, termination, IP

Related skills

• business-growth/deal-desk — operational enforcement of policy
• business-growth/pricing-strategy — sets prices that policy governs deviations from
• business-growth/contract-and-proposal-writer — drafts contracts respecting policy
• business-growth/channel-economics — channel deals subject to policy (with overlay for partners)
• business-growth/partnerships-architect — partnership terms subject to commercial-policy oversight
• c-level-advisor/cs-cro-advisor — CRO is co-owner of policy
• c-level-advisor/cs-cfo-advisor — CFO is co-owner of policy
• ra-qm-team/soc2-compliance-expert — policy compliance is audit-relevant evidence