What does CAC stand for in the context of customer acquisition?

In the context of customer acquisition, CAC stands for Customer Acquisition Cost. This term represents the total cost incurred by a business to acquire a new customer. It typically includes marketing expenses, sales expenses, and any other costs associated with attracting and converting potential customers into actual buyers. Understanding CAC is crucial for businesses, as it helps in evaluating the effectiveness of sales and marketing strategies and can inform budget allocations for growth. By calculating CAC, businesses can assess the return on investment for their customer acquisition efforts and make informed decisions about optimizing their processes to improve profitability.