Business owners are facing stronger competition than ever before. It seems like for every sandwich shop that opens up - two more are just a couple blocks down the street.

Because of this, word-of-mouth advertising is still one of the best tools businesses have to garner new clientele. New customers are not cheap - so it doesn't get much better then when a loyal customer brings in a friend or family member. Smart owners recognize the importance of word-of-mouth and reward it. So, why not help a local business out? You may just land a deep discount or freebie.

Here's some good places to make referrals:

Beauty salon/barber
LIke many service orientated businesses, salons/barber shops rely heavily on word-of-mouth. Many hair stylists turn their business cards into coupon referral offers. One experience I had with a stylist offered a free cut to someone you referred and 50% off your next cut.

Insurance agent
A lot of people stick with their insurance companies. I've had the same one since I was 16 (20 years!). So, it's likely hard for agents to get new clientele. Help 'em out with a referral. They may reward this by checking over your policy a bit closer when it comes due.

Mortgage loan officer
You don't need to use these guys too often - but when you do, you want someone you can trust and rely on. I was fortunate enough to have one referred to me when I bought my first house and have also used him on a second home purchase. I wouldn't go to anyone else and have referred a couple other people his way too. They likely won't forget your goodwill - and may keep in touch with you regarding refinancing offers or other important information.

Health clubs/yoga studios
My wife does yoga and the studio she frequents give her $5 off any new person she brings in the door. Health clubs are also noted for rewarding referrals.

Some medical practices
Another service that many folks tend to stick with, are dentists. So to attract new-comers, they are sometimes known to reward clients who refer.

Online web stores
If you look at the footer of many web merchants, you'll note they often have a link for "affiliates". If you sign up to be one, you can get rewarded with discounts and/or cash. If you have a website yourself, you can add a link to their web store - which could give you some nice, passive income.

Of course, this is not exhaustive. Are there other businesses out there where you have saved some money by making a referral?

Aaron writes at Three Thrifty Guys - a personal finance site devoted to helping folks keep a few more bucks in their pockets.

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