Using the power of "FREE" and creating viral referrals

I'm in the later stage of a pretty extensive local model and thought i'd throw out something I just thought of.

First, here's a brief description of what I'm doing.......down the page a bit is the VIRAL TWIST I just thought of....

My ultimate goal is to have a large number of local businesses paying for recurring services.
Primarily, most services will revolve around coupons. Coupons are a great way to use this sucky economy in your favor.

The bait.....
I'm setting up a coupon directory for local businesses.....using couponPAQ.
I'll let them get a taste for free. They can list two coupons...have theier own biz page with descriptions, google map, reviews, website link, mobile format also, 24/7 access etc. etc.

The upsells.....
Up to ten coupons, front page listings, own coupon domain linked right to their page, mini flyers to give each customers with their change (touting the website)

Also,
-email gathering/maintenance/mailing
-mobile site....qr codes and such
-SMS

Initially, I've selected one biz each of six niches.....such as pizza, restaurant, bar, hair salon, nail salon and sandwich shop.
(places I'm presently a regular customer)
They get offered full blown services....for six months....free.
These are high traffic repeat customer businesses that will hand out tons of flyers..... and coupons kick butt.
These businesses also have many competitors that will be easier to sell to because that is what their competition is doing.
Coupons will yield positive measurable results and these initial six should be easy to convert to paying customers

The VIRAL TWIST.....
This is fresh off the brain , so the edges are still undeveloped and rough.
Just to pick a random price point, let's say "Customer A" gets the whole shabang is going to pay $350 a month.
I'll give them a way to either get a substantial discount....or how about ABSOLUTELY FREE.
How? Real simple.....
Many local small business owners have business and/or friendly relationships with other biz owners.
When "Customer A" tells them about the extra business I'm getting them.....and then "Business B" says they were referred by "Customer A" and they sign up for comparable services....."Customer A" then gets a 10% discount......"for every referral signup".
"Customer A" can get down to Free....but they'll bring in about $3500 a month to get there.....with no effort my part.

Basically, I'd use a satisified customer....financially motivated......to bring in customers.
The ol' pyramid effect kicks in from there....