How do you figure out how to spend your time between doing product marketing as demand gen, engagement, retention, and sales?

This varies widely by company, org structure, and maturity.

When I worked for smaller start-ups, we only had 2 dedicated marketers: me (generalist) and my VP (also a generalist, but she was running sales as well!).

In that case, I had to divide my time by priorities for the business. This was determined as part of quarterly planning and product launches. If we had a product launch, then that quarter was dedicated to building the materials for the launch, and promoting the new product. In quarters where we didn't have a launch, I split my time among the other activities, based on the data.

What are the top 2-3 goals your company wants to achieve, and on which time horizon? If they want to acquire new customers, demand-gen and sales enablement would be your top activities. If they want to drive Monthly Active Users and feature adoption, more traditional product marketing activities would be a better focus.

In larger companies, there is a dedicated team for each of these areas, though they should be coordinating and collaborating.

For example, at Atlassian, we have separate PMM, Demand-gen/CLM, and Sales teams. We also have a Customer Success team who helps with the retention metrics. And "retention" might include cross-sell, up-sell, and expansion, which is a mix between PMM, CLM, and Growth teams.

There's many levers for each of these activities, so dividing them up based on skills and capacity is key. Some organizations focus their demand-gen teams exclusively on getting new customers into the pipeline. Some organizations want their PMMs to do lots of sales enablement, while others have them focus on collaborating with Product and influencing the roadmap.

I would argue that Sales should not fall into the marketing roles you mention, as that's a different skill and different activities. Sales should be focused on closing deals, which is a short-term metric. Marketing requires balancing short- and long-term metrics, so the strategies, activities, and skills are not the same as Sales.

I would recommend try to apply the common rule "80% of the business comes from 20% of the customers". We have our customers divided into 3 segments:

New-New: Completely new to the organization

Existing-New: existing customer but buys new product 

Existing-buying more: Existing customers buy the same product but buys additional plan 

For each product we see % revenue for each customer segment. Depending on that we prioritize if we want to focus on demand gen vs engagement vs sales. 

Say if new-new is your core performing segment, you should invest your time heavily on demand gen activities around top of the funnel activities - search, social, PR, events and others.

I agree with the great points made by Jennifer and Ruturaj, but want to add that the stage of the company matters quite a bit as well. 

For young companies, it is often beneficial to get engagement and retention right before trying to optimize demand gen and sales. Marketing and sales are going to be very expensive if you can't deliver value for customers and in turn make them valuable for you. If you've got a 90% churn rate and spend $1M on demand gen, you're going to get a terrible return compared with first spending 6-12 months bringing that churn rate down to, say 70% and only then spending the $1M on demand gen.

Every PMM should answer this question based on 2 factors -- the needs of the business and the strength of the funnel.

(1) Org & Biz Needs - If you have a strong sales team established with sky-high close rates, the strongest need might be in widening the funnel (demand gen). If you have a green sales team that is drowning in leads, but not effectively closing, then focusing your efforts on sales enablement or nurturing might make more sense.

(2) Funnel Strength - It’s like running a relay race… if you don't have anyone to pass the baton to, that baton is going to drop. So it’s important to get a baseline to start. I would try not to over index on any one stage until you at least have all stages covered at a basic level.

To be more specific -- If you can get a basic demand gen program up (even if it’s not world-class) it will start gathering some data and get you moving forward. Next comes engagement (often called nurturing) - it doesn’t take much to send a followup email after a prospect downloads a piece of content, for example. Once these nurtured leads become “sales qualified” it’s important that your sales team has the basic info needed to convert the prospect into a customer. Here, basic sales enablement materials are established. If your product is self-serve, ensure your website, free trial, etc has the information needed to convert this one-time user into a loyal user. Lastly, get a minimum-viable retention program established. Or at least a way to capture feedback so if there is churn, you can understand why. 

Once you have these basics established, I’d go back to your CRM or BI tool of record and focus your calories on (1) where the needs to the business are and (2) where your funnel is weakest.

It was said in another answer that 80% of your business comes from 20% of your customers, and that can tell you which market segment to focus on. It's sper valuable and important in prioritizing your audience (but doesn’t necessarily inform whether to focus on acquisition or retention, for example).