A CDN improves performance by caching content from origin servers at regional edge locations. When a user requests content through a CDN, if the content is cached nearby it delivers a "cache hit" from the edge server, otherwise it's a "cache miss" and the content must be retrieved from the origin server. Increasing the cache hit ratio is important to reduce latency and server load. Strategies to improve the ratio include optimizing cache control headers, ignoring cookies and query strings, and storing frequently requested content.