Good referral links will drive quality traffic to your site from quality sources.
Search Engines look at external sites linking to your site as one of the key ranking factors in their algorithm to determine where you appear.
A link to your site from another popular site talking about the same subject as you indicates that they trust and value your site as being related to that topic.
But beware, not all sites are equal and poor-quality referral links can do your site more harm than good!
In general buying referral links are unlikely to help you rank higher - search engines know where paid links come from and may even lower the rank of sites with paid links coming into them. You usually have to earn links from popular sites by creating high-quality, useful content that people naturally want to create links from their sites to yours.
That's not to say once you've written good content you can't reach out to other sites to let them know about your content and invite them to link to your site!
You don't have to look far to find places where you can add links to your website for free - there are thousands of directories out there.
Whilst it's unlikely directory listings will help with search engine ranking, some people do use these directories, so it's more likely to generate you some clicks than not having a link in the first place!
In an ideal world, getting a link from a directory which is focused on topics relating to your business will likely help to send you relevant traffic and is unlikely to do any harm (unless it's a spammy link farm) - doing some homework searching for "xyz directory" - with xyz being your industry or service is likely to help find you directories to consider adding yourself to, with those results coming top of search results being the best ones to start with as that's what people click on first.
That said, the best way to get high-quality referring links is to have good-quality, useful content on your website that people will want to link to.
This is usually best done by writing blogs
