As Jack says, we at EFC have had a few disasters but not many. Perhaps, an average of one a year. That's aside from occasions when some acts are a little disappointing or don't always perform at their best but we can't always anticipate when they might have an "off night".
The majority, however, are usually good at what they do even if they don't appeal to everyone's tastes(We cover a wide spectrum).

Unless we already know or have heard the act, we obviously listen to CDs, You Tube clips, and so on as well as take advice from other clubs and concert organisers. However, as Jack observes, this isn't always a true guide.
The best way to judge is by first hand experience but, even then, an act you may have enjoyed elsewhere might let you down or not make a successful transition into your own venue.

As regards Guest Matt's comments, it would be impractical and unfair to check out floor singers and those who offered to do very short spots (A longer support spot, fair enough) in this way. After all, everybody has to start somewhere.
Besides, the facilities to record yourself are relatively recent, In the past, people used to perform live, sometimes for several years, before they would ever dream of recording or be given the opprtunity.
Nowadays, it seems to be the other way around.