Customer Acquisition Cost (CAC) is the total expense incurred to acquire a new customer, including marketing, advertising, and sales costs. It is calculated by dividing total acquisition costs by the number of new customers gained in a specific period. A lower CAC indicates more efficient marketing efforts, while a higher CAC suggests a need for optimization. Businesses track CAC to ensure profitability and balance acquisition spending with customer lifetime value (CLV). CRMs help manage CAC by analyzing lead sources, tracking campaign effectiveness, and identifying cost-efficient acquisition channels. Reducing CAC can be achieved through strategies like referral programs, content marketing, and retargeting high-intent leads. Monitoring CAC is essential for sustainable growth, especially in subscription-based and e-commerce businesses where customer retention plays a major role in profitability.