Gross Margin Lifetime Value over six or twelve months compared to Customer Acquisition Cost (CAC). This metric incorporates gross margin into the LTV calculation to provide a more precise measure of profitability.
Example: If a company earns $300 in gross margin from a customer over six months and the CAC is $100, the gmLTV6/CAC is 3. Similarly, if the gross margin over a year is $600 and the CAC is $200, the gmLTV12/CAC is 3.