There are 2 reasons, how many links your website has coming from other websites on the internet is one of the major ranking factors for all search engines. Second the more links you have on other sites, the more exposure you site will receive (meaning more traffic).
1. Create a list
People love lists for example lists of resources, tips, top 10's and how to etc this will give other websites a reason to link to you. To put this tip in overdrive you could contact other sites in your niche and tell them about your article/ blog post, especially if you have linked to their site as part of a resource list. A list can have a massive viral effect if the information is useful to others in your market.
2. Submit articles
I know this is an oldie but it is still a very effective way of building links to your website. Other sites may publish your article especially if the articles are good. Also some article directories tend to rank well so you can use their authority with the search engines bringing in traffic for highly competitive keywords. The key here is to write a compelling resource box so the visitor clicks through to your site.
3. Social Bookmarking
Create accounts and bookmark the pages on your website or blog, this can be a tedious process as with most link building activities so using tools like socialposter.com and socialmarker.com will semi automate the process.
4. Use Free Blog Type Sites
There are many places you can create sites for free e.g. wordpress.com, blogger.com, squidoo.com, hubpages.com, wetpaint.com and the list could go on. Get some articles written and post them to the various sites this gives you the power to link to your main site using whatever keywords you want. Again this is another traffic generation tactic as your free sites will get traffic on their own.
5. Sign up for Google alerts
If you're not familiar with Google alerts let me enlighten you. Google has a free service where they will email you news stories, articles and blog posts related to any keywords you specify. What you can do is have a scan through these alerts for any stories related to the topic of your site. Then you would check out the site the story or article came from and see if they have a way you can leave a comment directing people to your useful resource list in a very helpful manner of course ;-)
There are absolutely loads of ways you can build links to your website or blog, just use your imagination and make sure you allocate some time everyday to building incoming links you will be surprised how quickly your traffic will increase.
