We're starting a service with a specific value for many home owners, still don't know if many will subscribe.
Social networks such as Facebook and others don't work for the profiles that we target. We'd like to encourage participants to invite their friends through email to subscribe too, but since the service is free I'm not sure how we can push them to take action soon. How would you formulate a call to action for a free service?
Why not learn from stack exchange? Make a provision for something like reputations and award high points to top referral providers.
How about giving them some incentive? What exactly are you offering? Do they need support? If there is a specific value for the user, then there should be a way to accelerate or enhance the benefit for said users.
I am thinking outside the box:
There must be some value for each additional person using your service; try giving 5-10% of that value back to the referrer and it should really increase the amount of people using your service
I would absolutely say that for step 1, emphasize the value and make it easy, easy, easy for them to recommend to friends. Monitor the success of that. Only then should you consider throwing prizes at it.
I was going to do an iPad giveaway to incent our users to recruit new customers and a friend at an agency told me to Google "Free iPad Giveaway" and the listings went on forever. It can seem like SPAM or a scam.
Make it about the value first. Make it easy. That should get some action. Then scale from there.
Using existing tools such as Facebook's "like" button can also draw people to your site.