We do something similar, it's a refer 3 get one free. We chose to give a free hair cut to start, for repeat referers (people who hand out and have more than 3 come back in) we up the value of the "free" if they have 6 cards come back they can upgrade to a cut and style, 9 they can add another simple service 12 or more they can have a chemical service.
I know my students really prefer working on people to their manequinn so we are always working on increasing the volume of our clinic floor, especially when you consider that our "staff" turns over regularly- with each new graduating class.
Direct mail also works well and community involvement, something that will draw the news to you. Fund raisers for a cause, cut a thons, contests I'm still learning and growing in my "marketing" job, it's still a little new to me but so far it seems to be paying off!!