Work out your customer acquisition cost and payback

The most important step is agreeing on definitions, because a CAC figure only means something when it's calculated the same way every month. Two teams with identical businesses can report very different numbers simply because one counts salaries and the other doesn't.

Kite proposes a definition for each part of the calculation and explains the choice:

• Which costs count. Paid CAC uses ad spend alone. Fully loaded CAC also includes salaries, agencies, freelancers, events, and marketing tools. Kite usually recommends tracking both, because ad spend shows channel efficiency and the fully loaded number is the one investors ask about.
• What counts as a new customer. For a subscription business, Kite counts a customer whose first paid subscription started in the period. It leaves out free trials that haven't converted, existing customers who upgraded, and customers who refunded in their first week.
• Which period to use. Monthly is common, and Kite can also report by quarter to smooth out a month with a big launch or a holiday slowdown.
• How to handle the lag. If buyers usually take three weeks from first visit to payment, September's spend partly produces October's customers. Kite can compare spend with customers from a slightly later window, and it says so in the report.

Kite saves the agreed definitions to your team's knowledge base. When you ask for the number again in three months, it uses the same rules, and it tells you if a change in your data makes one of them worth revisiting.

Kite reads your ad spend directly from the platforms, so the cost side of the number matches what you were actually billed. With Google Ads connected, it pulls cost, clicks, and conversions for each campaign over the dates you chose. With Meta Ads, it reads spend and results for each campaign across Facebook and Instagram. With LinkedIn Ads, it reads LinkedIn's own performance reports for the account and each campaign.

Costs outside the ad accounts, such as salaries, agency retainers, and software, aren't recorded in any marketing tool. You can give Kite the monthly totals in the conversation, or point it to the spreadsheet where your team already tracks them. Kite adds them to the fully loaded number and keeps them separate from ad spend, so you can see both.

Kite counts new customers from Stripe, because a payment is the clearest evidence that marketing worked. It reads the customers created in the period and their subscriptions, and keeps only the ones whose first paid subscription started then. It reads each customer's plan and price so it knows what they bought, and it reads refunds so a customer who asked for their money back in the first week doesn't count.

This step often changes the number more than people expect. A team that divides spend by trial signups might report a CAC of $90. Counted against paying customers in Stripe, the same spend can work out to $450.

Kite breaks blended CAC into a cost per customer for each channel, because the average can hide a channel that's losing money. To do this, it needs to know which channel brought in each paying customer. Google Analytics records the campaign and landing page behind each signup, and HubSpot records the source of each contact. Kite matches those records to Stripe customers using a shared email address or customer ID.

Here's what that can reveal. Your blended CAC might be $400, which looks fine. But organic search and referrals brought in 35 of September's 60 customers at almost no direct cost. The 25 customers from paid channels cost $15,000 in ad spend, or $600 each. Broken down further, Google search ads might win customers at $380 each while LinkedIn costs $1,400 each. That's the difference between "our CAC is fine" and "one of our channels needs a different plan."

When a customer can't be matched to a source, Kite counts them in blended CAC and reports them as unattributed rather than guessing a channel.

Kite works out payback two ways: with the standard formula, and from what the customers actually paid. The formula divides CAC by the monthly gross profit from a new customer. Kite takes the average first monthly payment from Stripe and applies the gross margin you give it.

The formula assumes every customer keeps paying. Real customers cancel, downgrade, and switch to annual plans. So Kite also follows each month's group of new customers through Stripe and adds up what they've actually paid, minus refunds. When that total, after margin, passes what you spent to win them, that group has paid back.

For example, the formula might say January's customers pay back in six months. But by June, Stripe shows that a quarter of them have canceled, so the group's actual payback stretches to nine months. That's the number you want to know before you raise your ad budget. Kite reports both figures and explains the gap.

Annual plans need their own handling. A customer who pays $960 up front earns back a $400 CAC on day one in cash terms. Kite reports cash payback and spreads the annual payment across the months it covers, so you can present whichever view your investors expect.

Kite turns a one-time calculation into a monthly report, so you have an answer ready the next time someone asks. You can ask it to run on the first of each month. It delivers the result to a Slack channel, by email from your team's Kite address, or as its own conversation in the Kite web app.

Each report shows blended and fully loaded CAC, CAC by channel, and payback, with the change from last month and a plain explanation of what moved. If CAC rose because Meta spend increased while customers from Meta stayed flat, Kite says so and names the campaigns involved. Kite can also publish the figures as a dashboard that refreshes its data when you open it, or as a shared report you can link in an investor update.

The numbers then shape the next round of work. When one channel's CAC is far above the others, Kite recommends moving budget toward the channels that win customers cheaply, or fixing the landing page where paid visitors drop off. On LinkedIn Ads, Kite can propose budget and bid changes for you to approve, and it can pause a campaign that's spending without producing customers. For the other ad platforms, Kite brings you the recommendation and your team makes the change.