[ivyirwin]

I am a huge believer in the word of mouth method. I've been doing web design and programming for over 10 years and have not once cold called or advertised my services.

I think there are two important aspects of "word of mouth" however. First, is you have to get the word out. Don't be shy about telling family, friends, colleagues, people you meet in a bar, etc. about what you do. Depending on your audience, be prepared to "present" your skills in an appropriate way. For people who may not be your direct client but will be acting as the courrier of your message, keep it simple – you probably won't get the business because of what you say to them but because of how they know you out of context from business.

The second important part is to give your clients a great service experience. You don't have to be the best at what you do as long as you find a way to make your clients happy. Clients can then speak to both your product and your service. Client referrals are over 80% of my new business.

[matznerd]

Word of mouth is definitely the best way to go about it. I have also had success by going through friends who work at smaller digital agencies and PR firms. Places like that sometimes lack technical people, but they have a portfolio of clients who may be in need of web work. They basically refer the job to you or you work as a contractor under them.