Strategic website development: avoiding squeaky-wheel engineering

This article was originally published on Inman News:

Whether you’re building your first website or re-engineering one that’s been live for years, it can be difficult to have a clear vision. The cacophony of advice from consumers, industry associates, and vendors makes for a confusing outlook on the path toward a valuable resource for your company and your customers.

Too often our attention is focused on the loudest voices — the proverbial “squeaky wheels.” Whether they’re pushing shiny new objects, preaching easy profits, or attempting to scare us away from purportedly dangerous avenues, they’re often doing so for their own short-term personal gain or satisfaction. The long-term success of our businesses, in most cases, isn’t a large part of the squeaky wheel’s focus.

To avoid squeaky wheel engineering in the development of a website, business owners need to be open-minded, but also analytical, about every new idea or strategy. Even more so, they need to be highly skeptical about the veracity and merit of the source of any advice they receive.

Unsolicited consumer comments

Consumers who contact your company with problems or suggestions about your website can be highly valuable. Technical problems that users are experiencing and non-intuitive navigation that impedes discovery are just a couple of the many issues that consumers can bring to light. Businesses should encourage their users to report suggestions and problems, as they’re clearly the same issues that many other users are facing.

At the same time, one user’s opinion does not necessarily carry across to the majority of users’ preferences. While a handful of your website’s visitors may really prefer the multi-field, complex search form that they’re comparing on your site and others’, there may be twice as many other users quietly using your simple search and loving it. Changing your website’s look, or functionality, to appease a minority of your users is the quickest way to send the majority off to someone else’s business.

So, how do you find the right advice, or at least the right starting point for making website development decisions?

Analytics

If you’ve got your own website, there is no greater truth about its effectiveness than analytics. How users get to your site, what they do on the site, and how long they stay will tell you almost everything you need to know about what is currently working, and what is not.

Whether you’re using Google, Moz, Bing, or some other webmaster/analytics tool, you need to take the time to study your analytics. Which on-page buttons get clicked, which links get selected, and which get ignored? Which pages are consumers landing on from search results? How quickly do they leave, or do they continue to other pages? Which is the most popular landing page, link, or piece of content that drives consumers to actually sign up/register/purchase?

Watching what consumers actually do on your website, as opposed to what they say they do, is the fastest shortcut to aligning your product with their preferences. Tracking 1,000 consumers’ actions anonymously yields far more valuable resources than listening to one of them rant.

Industry associates with analytics

If you’re starting a new website, you don’t have past analytics to review. There are certainly others in your industry doing the same things you are, however. While in most industries, competitors hide their analytics away from others, real estate is a rare breed where there are associated companies around the country who will lay out exactly what they are doing online. These are the people you can trust–they’re not pitching you a line, they’re showing you the proof.

Find the discussions online about successful companies that have analytics backing up their success, and you can learn from their experiences. See which vendors, strategies, navigation, content, etc. work for them. These are not people selling a product or asking for you to fix something to fit their preferences. They’re the crazy kind of people who believe that by laying their business blueprint out online for everyone to see, they’ll benefit in the long run. Take them up on the offer.

Surveys and focus groups can broaden input

If direct consumer feedback is your ultimate goal, make sure you’re receiving it from a statistically significant portion of your current or potential customers. There’s a lot to be gained from a broad sector of your customer base giving feedback and suggestions for your online direction.

Focus groups and surveys can allow you to hear from more than just the customers who send you unsolicited comments. They provide a more diverse group of consumers who you might not ever hear from without directly asking them for input.

Just be very careful that you keep the results of these kinds of programs in a separate bucket from your analytics. The results are purely qualitative, not quantitative, and the two don’t mix well. Surveys and focus groups are more useful in the idea generation stage of business planning, because of their skewed representation.

Every method has flaws, and some of your consumers are wrong

Surveys have plenty of flaws. Users have to opt-in to the process. The responses you receive will overwhelmingly come from customers who are unusually upset, happy, or bored. The consumers who are satisfied with your website, but busy, will likely not respond, and those are a very important segment of your base. Those who didn’t respond may, as an overall group, have very different opinions and habits.

The questions you pose in a survey will often lead consumers to answers they wouldn’t have supplied on their own. If you suggest potential changes to your website, a user will often decide that they are good ideas, even if they hadn’t previously felt the need for these changes. This can create the false sense of desire for a product or function from the overall customer base and create unnecessary development work for you.

Focus groups often exacerbate surveys’ problems. Your opt-in respondents are now not only a skewed sample based on their emotional pull to be involved, they’re also the kind of people who want to speak in public. The feedback received from a focus group can often be influenced by consumers’ need to make a point, to agree/disagree with others within the group, and to applaud or indict the business or services being discussed. In short, the results can include some great ideas, but can also create a wildly exaggerated picture of what your consumer population feels.

Don’t be a slave to analytics, either. While the truth buried in that data might be the most powerful tool in your arsenal, success isn’t purely traffic flow and conversion rates. You may find that a particular piece of content is wildly popular for brand recognition, but doesn’t drive a lot of customer sign-ups. Other parts of your website might be driving a higher conversion rate, but turning off a very high rate of the consumers who don’t sign up or register.

You’ll have to decide on your own what your business strategy is for these kinds of analytics questions. Short-term conversion might be the one and only goal. Driving long-term relationships at the expense of some short-term sales may be a more palatable direction for your business. Keeping an engaged, smaller core of users could be preferable to driving a wide range of traffic with less focus.

Choose a direction, find reliable comparison points, and verify your results

Developing your website requires you to have a strategy. Changing direction based on a comment from a colleague, a complaint by a customer, or a story about a new product is squeaky wheel engineering, and it will get you nowhere quickly. When you know the direction you’d like to go, find verifiable examples of others who are doing what you’d like to do. Plan your development to use tools that have a verified track record of success, and then monitor your own progress with analytics.

When you know exactly what you’re trying to achieve, your path is much clearer. Working toward that goal with confidence makes it easier to avoid distractions and the squeaky wheels.

Property Tax Swap or Levy Duty Upshift: Solving WA’s McCleary Decision on School Funding

This article was originally published on the Seattle Homes Blog.

The recent decision by Washington’s Supreme Court on school funding is a complex topic. When it’s broken down to its basics, however, there may be a straightforward solution to a large portion of the financial demands created by the decision.

In a nutshell, the state constitution says that Washington has a paramount duty to fund basic education. The court decided that, currently, the state is not funding basic education adequately.

To be clear: the court said that the state itself is not meeting its obligation in funding basic education. This means that the overall budget for education needs to come from the state, not other sources. While the state property tax and sales tax fund around 70 percent of the education budget, municipalities across the state pick up around 20 percent of the education tab through local levies on property taxes (the federal government covers the rest). There may be some need to increase the total funding for the state, but making sure all funds come through the state will also be a priority.

This is the focal point of the so-called “Property Tax Swap”. If all of the money that local homeowners are paying in levies to their cities was instead being paid to the state and earmarked for schools, the education budget could be funded with those same dollars, but it would be the state supplying the funds it is constitutionally required to provide. It’s essentially a levy duty upshift–putting the responsibility of schools back to the state venue where it was meant to be.

It sounds a bit simplistic, but sometimes that’s the way accounting works. The state can make up a large portion of its lacking education budget by simply taking in a larger state school levy (increasing the current rate on the school levy portion of the property tax), while reducing local school levies by limiting the local rates charged. Statewide, the plan is revenue neutral. There is no additional tax revenue coming from taxpayers statewide as a group, or going to schools–there’s just a larger amount of the money coming from the state to the schools.

There are some side effects that could create dissension. Projections show property owners in wealthier counties or school districts paying more in property taxes than they had before, and vice-versa for lower-income districts. While there is some resistance to that idea, it answers another part of the court’s concern, which is the current uneven distribution of state education funds. The idea has bi-partisan support, as it was first posited by Democrat Ross Hunter, and championed by former Attorney General Rob McKenna, a Republican, during his campaign for Governor. The widespread support is due to the more reliable long-term funding mechanism for education that doesn’t rely on individual districts renewing their local levies every few years.

Just as importantly, it minimizes the funding gap that now exists in the state’s education budget. While there are many other tough decisions to be made in funding the rest of the education budget and satisfying the Supreme Court based on the McCleary decision, this is one fairly painless fix with a big payoff. Taxpayers, on the whole, pay nothing more, and that’s preferable to across-the-board tax hikes to nearly any voter.

REALTOR® groups generally approve of the idea. While we oppose most property tax increases, we support sensible property tax rates that build quality schools and infrastructure. Good schools make for good communities, which is why a predictable long-term source of funding is in the best interest of the real estate industry as well as every individual in the state. Maintaining the current funding source for schools, while reducing the need for state government to increase other taxes, is good for Washington schools and for Washington businesses.

Is There A Real Estate Bubble in Seattle? Inflation and 11% of our Home Equity Says No.

This article was originally published on the Seattle Homes Blog:

Home prices are on the rise in Seattle, and home buyers who remember the last real estate downturn well are mindful of the possibility of another drop in real estate prices in the future.  So, are we building up to another Seattle real estate bubble?

The most recent data say “No.”  While home prices have certainly appreciated in the area for the past few years, much of those gains were simply due to the long-term necessity of reversing that extended real estate downturn of the late 2000s.  Price appreciation, according to historical data, is the unequivocal course of real estate for the long-term, due in large part to inflation.

Seattle Home Prices and Active Real Estate Listings, 2004-2014

No Seattle Real Estate Bubble

Home prices in Seattle are still almost 11 percent lower than they were at the real estate peak in 2007.  August 2007’s median home price for the city of Seattle was $498,000.  As of last month, our current median was at $444,000.  There’s no rush to get back to those peak levels immediately, but idea that we’re nearing a bubble similar to what we saw in 2007 just doesn’t pan out yet.

There’s a bigger reason for this, when we look at the long-term effects of the economy.  Inflation makes general consumer prices rise, no matter if the market is hot or cold (we rarely see price deflation in the overall U.S. economy).  In 2007 we saw 2.8 percent inflation.  In 2008, as the downturn really got rolling, we hit 3.8 percent.   The worst economic year we’ve seen in decades saw just a 0.4 percent deflation rate, which was immediately wiped out by 1.6, 3.2, 2.1, and 1.5 percent inflation rates through 2013.

The big picture here?  We’ve probably seen price inflation across the country of around 15 percent since 2007.  Of course, this doesn’t translate directly to home prices, but the overall takeaway should be fairly clear–home prices today are nowhere near what they were during the last real estate bubble.  The situation is vastly different, and while that in no way guarantees a healthy real estate market going forward, it certainly makes the comparisons to 2007 unwise.