Referrals can be the cheapest form of advertising. They can also be the most expensive form of advertising. Why? When you do a good job, a few people may talk about it to their friends, relatives, and neighbors. If you do a poor job, make them mad, or can't satisfy a client, that person will tell everyone they know never to use your company again and explain why. That type of advertising is incredibly expensive and damaging.
If you are like most contractors I know, you try your absolute hardest to do a great job that the client and you can be proud of. Unfortunately this is the expectation of the client and they need to be gently prodded to talk about your job at their home or office. If you can do this, through some simple activities I'll describe below, you'll find that referrals will become one of your cheapest forms of advertising.