I definitely use testimonials and sometimes have people ask for referrals before I am hired to do a job. I would say they are very important in establishing trust, and they do work. Getting them can take time, but it's worth it, especially on the web. I myself am influenced by testimonials and reviews. I have made buying decisions, both in favor and against, based on testimonials or reviews.
I would just add this in using testimonials because just having them does not automatically instill trust. First, use them appropriately. If you see scam sites using testimonials (many do), that is the best example of how not to use them. Second, make them credible and verifyable whenever possible. When I use testimonials, I usually include links so the testimonial can be verified.
And of course, you do need permission to use them. If you're just starting out, getting testimonials in return for price discounts can be a win-win. Your customer gets a good deal, you get to use their testimonial, whiich has great value and helps get your name out.
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Steve Chittenden
Graphic design, web design, professional writing, and marketing.
" Far better is it to dare mighty things, to win glorious triumphs, even though checkered by failure, than to rank with those poor spirits who neither enjoy much nor suffer much, because they live in the gray twilight that knows not victory nor defeat." -- Theodore Roosevelt
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