The “growth at all costs” approach is being reconsidered as businesses realize the importance of efficiency and scalable, cost-effective operations. The focus is shifting towards acquiring high-value customers and understanding the associated costs. Customer Acquisition Cost (CAC) measures the money spent on sales and marketing to gain each new customer. It helps businesses identify profitable customer segments and effective acquisition channels. CAC is calculated by dividing total sales and marketing expenses by the number of new customers. A "good" CAC depends on industry benchmarks and other business factors like product pricing and sales cycle. The LTV:CAC ratio, which compares customer lifetime value to acquisition cost, should ideally be 3:1.

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