Internal link building can greatly affect your SERPS for the keywords you are trying to rank for and give a tremendous amount of relevance to Google as to the main keywords of your website AND internal link building can also have a positive affect on your Bounce Rate.
Internal Link Building is when you link back to your own home page within your site's content with the keywords you are targeting and want to rank for in the anchor text.
Deep Link - Internal Link Building is the same concept except you link back to pages on your website other than the home page (deep pages) with respective keywords as the anchor text.
For example, I want my blog to rank for the keyword search engine optimization and so on every post page of content on my site, where I will have the keyword search engine optimization I will link back to my home page at least once per page.
Now you don't have to add the link every time that keyword appears on a page, but at least once or twice is good.
By the way, this works best when the links are within content, not links just added to a page, this way they are natural and look better. One exception to this rule is the footer link with your best home page keyword in the anchor, this should be a standard practice.
Here is a screenshot:
The links are underlined in blue and link back to the home page and other content pages within this blog. You can also see the links within this post that link back to the home page and various other posts on my blog.
Bounce Rate and Internal Link Building
Internal link building can have a positive and powerful effect on the the bounce rate of your website.
Bounce Rate is a term used in website traffic analysis. It represents the average percentage of initial visitors to a website who "bounce" away to another site, rather than continue to explore or browse to other pages within the same site.
When you provide rich interlinking of all your website pages this gives visitors more to click on and easier, immediate access to your site's relevant content and easier navigation, which makes them stay longer on your site and this can greatly improve your bounce rate. Don't leave it up to the visitors to explore your site, put your content "in their face" enticing them to stay longer and explore more of your site. To view and analyze your bounce rate set-up your sites with Google Analytics.
This may seem like a tedious process but it is one of the best on-site SEO strategies. If you are using WordPress there are plug-ins that do this on auto pilot for keywords and urls you assign such as the KB Linker.
You can use Google Webmaster Tools (from the Dashboard click on Links Tab and then Pages with Internal Links), to check which of your pages are lacking internal links and go back and add links to the content.
Now, go build Internal Links!