Customer Acquisition Cost (CAC) represents the total cost of acquiring a new customer, including marketing, sales, and advertising expenses. It is calculated by dividing acquisition costs by the number of new customers gained. A lower CAC indicates efficient marketing efforts, while a higher CAC suggests a need for optimization. CRMs help track CAC by analyzing lead sources and campaign performance. Reducing CAC involves referral programs, retargeting, and optimizing ad spend. SaaS, e-commerce, and subscription-based businesses rely on CAC analysis to balance acquisition spending with Customer Lifetime Value (CLV) for sustainable growth.

Retention rate is a key CRM metric that measures the percentage of customers who continue doing business with a company over a specific period. A high retention rate indicates strong customer loyalty and satisfaction. Businesses use CRM tools to track retention metrics, identify at-risk customers, and implement engagement strategies that enhance loyalty.