How do you balance demand gen targets against sales quotas and company-wide revenue goals?

I always think about demand generation's contribution to company revenue. For example, I think about marketing contributing to inbound, new logo pipeline + ARR by segment. Marketing should contribute more to an SMB segment (80%+), and less for an Enterprise or Strategic segment (~30%). All marketing demand generation goals from SQL up to MQL and lead should be derived directly from the revenue goal. Ideally, that revenue goal is built from a shared model across finance, RevOps, sales and marketing, so everyone's aligned on who's contributing what and the key assumptions to get there. For example, if marketing's responsible for 50% of a $1M target, that's $500K in ARR. Assume you need a pipeline coverage ratio of 4x, so you need to generate $2M in pipeline. Using your average deal size of $25, that means you need to generate 80 opportunities. Your Lead, MQL and SAL targets should tie to get to that 80 opportunity target.

Sales quota is a slightly different story as most of the time finance plans have some kind of % quota attainment built in, which accounts for ramp, attrition and promotions - so I'd be careful about signing up for a marketing target that scales with the number of quota carriers, UNLESS your marketing budget or resourcing scales along with that.