Testimonials help encourage potential customers to take action because they see that others have already tried it, and it worked. A person who is reading a testimonial can relate to similar circumstances and is looking for your solution. Because the testimonial speaks directly to people, it helps remove their fears and uncertainties about what you offer.
You have to have a proven track record to ask for a testimonial so if you have an established base of loyal customers and clients, you have access to free marketing through their positive feedback and stories.