Glossary · Marketing Strategy
Full-Funnel Simulation
also: agent-based marketing simulation · funnel model · full funnel simulation · simulation model · marketplace simulation
Definition
Full-funnel simulation models the connected dynamics of awareness, consideration, conversion, and retention using agent-based or system-dynamics methods. It reveals nonlinear budget allocation effects — that doubling top-of-funnel spend may not double conversions if mid-funnel conversion rates are the binding constraint.
Spreadsheet funnel models assume independent linear stages. Real funnels have feedback: retained customers refer new ones, saturated audiences dampen top-of-funnel response, creative fatigue compounds through the year. Agent-based simulation captures these interactions and reveals counterintuitive optima — often the highest-ROI move is expanding mid-funnel capacity, not buying more awareness. Marketplace businesses especially benefit from simulation because of cross-side feedback effects.
Essays on this concept
- Marketing Strategy
From Acquisition to Monetization: A Full-Funnel Simulation Model for Scenario Planning in Marketplace Businesses
Marketplace unit economics are non-linear. A 2% change in take rate doesn't produce a 2% change in revenue — it cascades through supply-side behavior, demand elasticity, and liquidity dynamics. Spreadsheets can't capture this. Monte Carlo simulations can.
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