Linking your site from other websites is one of the most common ways to get your site noticed on the internet.
However, there has been some misuse of this technique in the way of creating 'link farms'. This has caused the search engines to take notice and set restrictions of sites using this link farming technique. Moreover, if you are a website owner that uses link exchanges correctly, you can get some great results with this technique and see significantly more traffic coming to your site, which in turn will help increase your search engine ranking.
The basic method for link exchange is a simple link swap where you contact another website owner and offer to put their link on your website in exchange for them putting your link on their website. The correct terminology is a reciprocal link. You would usually do this with a website that had relevant content to your website.
Another common way to build links to your site is to pay for incoming links from high ranking websites. This is an effective method but the payment may be recurring on a monthly basis.
You can also add article marketing to build links. Article marketing is simply writing articles that are relevant to your niche and then submitting them to other websites, mainly article directories. With each article that you submit, you include a link to your website. You can then submit your article to high-ranking article directories like EzineArticles.com. Readers love to know more about the topic they are searching for and if you provide good information in your article then your readers will more than likely click on your link and visit your website.
Joining a forum online that relates to your niche is also a good idea. You can become a contributor by posting regular posts and comments. Set up your signature to include a link back to your website and every time you post on the forum you are creating another link pointing back to your site. If you make your comments interesting and informative, other forum members will likely click on your signature link and visit your website. Before you do this, please read the forum rules. Some forums strictly frown upon "plugging your site, product or business", while others welcome it. Some forums even have a thread set up specifically for self marketing, so make certain to read their do's and don'ts before hand.
Start a blog that uses RSS feeds and submit the blog to search engines and RSS directories. This will give you extra internet exposure and remember to link your blog to your website if it's not already part of your site. You can post new content to your blog regularly to increase ranking and exposure.
To increase the traffic to your website you need to be prepared to put in the time and effort required. There are also methods that you can pay for to increase rankings such as the point about paying for inbound links. You can also pay for AdWords advertising to promote your website. If you can afford to pay for these services they will benefit your website but if you can't afford them right now then just try some of the free methods.
With any of these link building methods you need to target a specific audience to your niche. This is particularly so with the paid methods as you don't want to pay to receive visitors that have no interest in your niche, product or service.
You also want to keep your current visitors coming back and you can do this by having an interesting and quality website that they will want to return to. Monitor each method that you use for building links and find which one's work best for you, then continue to build using the methods that are working well.