CAC, or Customer Acquisition Cost, is a key marketing metric used to measure the cost of acquiring a new customer. It is calculated by dividing the total marketing and sales expenses by the number of new customers acquired during a specific period. CAC is a crucial metric for businesses as it helps understand the effectiveness of marketing efforts, allocate budgets, and evaluate the overall profitability of customer acquisition strategies. A lower CAC indicates more efficient marketing efforts, while a higher CAC may signal the need to revise or optimize marketing strategies to improve cost-effectiveness.