Understanding CAC is essential for several reasons:
Budget Allocation: It helps businesses allocate their budgets more effectively by identifying the most cost-efficient channels for customer acquisition. Profitability: By keeping CAC in check, businesses can ensure that they are not spending more to acquire customers than what those customers are worth in the long run. Investor Attraction: Investors often look at CAC as a key metric to gauge the potential return on investment. A lower CAC can make a business more attractive to investors.