Whats your success rate? Unless you're willing to pay for the link, the success rate would be horrible IMO.
Blogger Outreach - What Do They Think About SEOs? - Moz
here's a great article about what bloggers think about SEOs. They just dont want to link to you for free!! But i guess that will highly depend on how you make your pitch. Like Rand says, build a good relationship with the webmaster, comment on his blog, follow him on twitter, try to interact with him and then only make your move.

Most of what I do is outreach, I also talk to a lot of agencies about it.

The biggest problem that most people face is that their mindset is something along the lines of "how do I get a link out of this person?"

A couple of slight changes and you will have a lot more success than the majority of people.

1) You can remove most of your rejections in the targeting phase, do your research and make sure that the person you are targeting is a good match. Will what you have benefit their readers? If not then....

2) Give them something worthwhile, a lot of the agencies I visit simply ask for a link "to our site which is super cool", instead create something for them that will directly benefit their audience, and make it good.

A recent example of this was a client of mine (email marketing industry) looking for industry related links, I hunted out and found that a local UK government site had a guide on how to create a gmail account that they could then use to log in to their website.

The guide was about 2 years old, and we all know how much gmail has changed in that time, we just made them an updated guide to put on their site (PA 98, DA 99) and they put a lovely thanks link at the bottom right to my clients site.

3) Follow up with them, I like to send a few emails and then give them a call. This is great for building a relationship, once you have a relationship with somebody they think of you.

The next time somebody asks this woman "hey, do you know how to ....(something I can do)..." she will send them to me.

Relationships are key, do your research properly and point them to something that will benefit them and people are generally happy to provide a simple link back to the person who they know and has something that benefits their readers.

Change that mindset to "what would make them want to link to me?" and then make that happen.

P.s. average success rate 40%ish, some sites as high as 70%.

@dan, great tips! And thanks for sharing. The success rate is not that bad at all but it do take a bit of time to get link exchanges.