February 25, 2020 – Whether you buy and consume vendor services or sell them in the marketplace, the past decade across the mortgage ecosystem has experienced seismic changes. This blog post is a compilation of some of the history and reasons behind the changes, as well as some recommended actions to take in order to remain relevant.
See our recent article published via the MBA NewsLink, a satirical piece on impeachment. Yes, you read that right… on ‘impeachment’ – but no political references whatsoever. Just an attempt at creatively explaining the absolute most impactful changes to the vendor landscape since the 2008 Great Recession. Find the MBA article HERE.
What to Expect From the Article:
- The decades-old vendor sourcing and oversight model got impeached (and brutally removed)
- WHAT happened
- HOW it happened
- And exactly WHY
- Most essential though – I review what you should be doing about it
Furthermore, in our constant discussions with lenders and vendors of all sizes, we regularly hear the following questions, in which we address in the article.
- Exactly who is responsible for vendor souring now?
- Why have sales cycles exploded?
- What can I do to better navigate?
For decades, the vendor sourcing process in this industry relied upon four primary approaches… 1) Attending trade shows and swapping business cards; 2) Cold calling; 3) Static directories; 4) Word of mouth referrals. It's a new day, and these approaches are not what you should cling to.
Next-Gen Vendor Sourcing & Oversight - A New Era
This was the topic of our January 27, 2020, interview with David Lykken, as I was the Hot Topics’ guest on the Lykken on Lending podcast. While the interview touches upon a few themes from the MBA article, we go into far greater detail on the shifting sands of sourcing and procurement, citing some surprising stats and some sage advice on how to pivot.
Beyond the ‘impeachment’ of the old vendor sourcing model, the competing dynamic that happened in parallel was the massive influx of Millennials, now serving as key influencers and decision makers on vendor selection. Bottom line – They do not conform to the sourcing model of the past or those four primary approaches.
Topics Covered within the Podcast:
- How has vendor sourcing and oversight changed in the past decade?
- How are Millennials impacting the change?
- What vendor related trends and challenges are you encountering?
- What are some advancements our listeners can leverage for better efficiency and reduced risk in vendor selection and oversight?
- What future enhancements and innovations can the mortgage industry expect to see in this space?
Listen to the full podcast HERE.
Also, you can listen to some specific sound bites from the podcast, such as:
Listen: The front door to an organization is a lot harder to find now... after the meltdown the vendor sourcing world changed...
Listen: Lender sourcing cycle times have extended to 24 months or more...
Listen: If you look at the Millennial generation, 44% of this population are minority, making them the most diverse adult generation of our lifetime...
Listen: What are you doing to pivot your mortgage company to connect with Millennials? You have to meet Millennials where they hangout on their terms...
Listen: Keep in mind that innovation is not enough, you have to provide content that Millennials would want to share...
Listen: Decisions are no longer made by a person... they're made by a committee from across a mortgage operation...
Listen: Lenders are doing more with fewer vendors... in 2018-2019 there were 80 mergers and acquisitions... it's one a week and we don't hear of every transaction...
Listen: When it comes to vendor sales teams... we're seeing a lot less cold-calling and a lot more content marketing...
Listen: Cyber security is one of the biggest fears in the financing industry... you can now get widespread insights into your vendor vulnerabilities...
Listen: How far can a mortgage company outsource responsibility to vet their vendors...
Listen: Interested in getting your mortgage company listed with Vendor Surf? Here are the details...
Listen: For lenders using Vendor Surf... getting started is free...
Should you read the article and listen to the 30-minute podcast, an investment of just 35 minutes in total, you will come away with a thorough understanding of where we have been, where we are now, and where we are going as it pertains to vendor sourcing and oversight.
There is an urgency to recognize the changes (an understatement), and to craft strategic plans to meet these new challenges head-on.
Nobody Out-Vendors the Surf !!
Thanks for reading.