To answer the original question: "Which way do you market that gives the most bang for your buck?" I think in almost any industry, referrals has to be the answer. Yes, other methods allow you to reach more people more quickly, but when you have a strong referral source, it constantly works for you behind the scenes while you go about your business - and it costs you nothing.

Of course the key to building business through referrals is giving a good product or service at a fair price. Now the term fair price is highly dependant on how good the product or service is ... for example a widget that costs $10 and has a 30 day warranty may not be considered as fairly priced as a $15 dollar widget with a lifetime warranty. It's not just about price - but about what your customers get for that price. That being said, the 'type' of referrals will be in direct correlation to your reputation. A high quality type provider will attract referrals from those seeking higher quality. Likewise, if you are known as the low price leader, people who seek that type of thing will refer you to others who seek the same. Now if you can offer the lowest prices AND high quality ... well then you're golden! (sorry - off on a tangent!)

The thing too about referral business - if your customers are thrilled with what you gave them, not only will they tell others, but they'll LOVE telling others. Even still, people are often buried in their own world and don't think to tell about a great product or service unless they're asked for a recommendation. With that in mind, don't be afraid to ask for referrals. Sometimes we just need to be reminded...