How do I judge the deli’s loyalty card and repeat customers?
Ask how many cards are actually in use and how often they are used, not how many were handed out. Look at visit frequency, average spend and what the rewards cost the deli. Then watch the shop for regulars, and ask whether the card data and customer list come with the sale.
A loyalty card can flatter a deli. Handing out a card is easy, so ask the seller what counts as an active member and how many have been used recently. If the card is on a phone app or a till system, ask for a report on visits, spend and the date of the last visit by member.
Look at the cost as well. Free coffees, discounts or points all come out of the deli’s margin, so ask how much was given away and whether the rewards bring customers back or reward habits that would have continued anyway. Ask your accountant to help read it.
Then check against what you see. Spend mornings and lunch hours in the shop and notice who is a regular, who is greeted by name and whether people ask about the card. A busy shop with few card users might simply have an unpopular scheme. Finally, ask who owns the data and the program. Can the customer list and the card system be transferred to you? After you buy, decide what to keep, change or end. Ask whether any special offers shaped the sign-ups, since a burst of sign-ups from a promotion can look like steady loyalty.
Key takeaways
- Ask for active members and recent visits, not cards issued.
- Count the cost of rewards against the repeat business they bring.
- Observe the shop to see who the regulars really are.
- Confirm whether the card system and data transfer to you.
Related reading
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Sources
This answer is checked against primary sources. Links were last confirmed on the dates shown.
- 01Business Development Bank of CanadaGovernmentHow to conduct due diligence when buying a business
- 02Business Development Bank of CanadaGovernmentWhat are the steps to buying a business?
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