Anilrgowda

When it comes to keyword selection, clients always want to optimize for the highest searched terms (according to keyword research tools) and those alone. It takes some convincing to get them to go after lower search volume, but more relevant phrases. It's become a regular part of the cycle with my clients, especially those who are learning about SEO and the process of optimizing a site.
Real Searches vs. the Numbers Game

Last week, a client wanted to know why I had suggested several phrases to them that showed 0 searches in Wordtracker. The reason? Those phrases were showing REAL referrals in their logs for several variations. People were actually using those phrases to search, and although they found my client's site, it wasn't doing a good job of focusing on these relevant searched-for terms.
The Keyword Research Process

I usually have the client provide me with the typical words they think someone might be using to find the product, service or information that they offer. We look at what competitors are optimizing for and then I look at their log files. When possible, I talk to the client's salespeople and a few customers about the words that describe the products or services.
Then I may play with Altavista to see what phrases it thinks are related (you see a list of related searches to the right of the search results in AV). Then I'll hit Wordtracker and the Overture suggestion tool to get an idea of how people are searching in that industry.
Other keyword research tools that may be helpful are:

• Search Term Research by PrioritySubmit
• Keyword Research Tool by Webmaster Toolkit
• Keyword Suggestion Tool by DigitalPoint Solutions
• Google Adwords Keyword Tool by Google
• Keyword Suggestions for Google by SEO Chat
• Keyword Generator by Espotting Media

(Thanks to "BobMutch" for the list of keyword research tools -- see more great info on his Free Seo Tools site . These tools are a great help in suggesting possible phrases that you may want to optimize for, but they are limited. They aren't inclusive of all searches, and they can't foretell the future. Just because people searched on a term last week, doesn't mean they'll search for it next week.
Many people today simply run through Wordtracker, grab the results that have a high KEI, and set about optimizing for those phrases. Some of the problems with this tactic are:

• They believe that general phrases are relevant because they show a high number of searches. However, general phrases often bring traffic -- but no sales. Specific phrases bring traffic that converts.
• Wordtracker's KEI function doesn't tell you much. It doesn't really show how many other pages are competing for your phrases, and it doesn't really matter anyway. You are only concerned with the top 10 results!
• Many keyword phrases are seasonal -- seeing what people searched for last month doesn't always tell you what they will search for next month.

Common Sense Keyword Selection

What many people miss is the common sense aspect of search; what words will people who want to find your goods or services use to search for it? Besides keyword research tools, your client, their salespeople and customers, here are 3 additional ways of finding out what people are typing in at the search engines to find what you offer:

• Trade organizations or industry news sites
• Usability testing/surveys
• Log files

A note about log files -- they can be deceiving. If you have a high traffic phrase that is garnering lots of referrals, and you have a high exit rate from the page that is receiving those referrals, it's likely people aren't finding what they wanted. On the other hand, log files are a treasure trove of information. You can find some great search terms that are not very competitive and maximize them on your site.
Competitive phrases may not be as competitive as you think (check the top 10 search results to see) and the highly searched upon phrases may not be as lucrative as you would hope. People often refine their search 2-3 times before getting the results they expect.
The bottom line when it comes to keyword research is that it pays to know the industry. Use all the great tools available to help you come up with variations and alternate terms to target, but use common sense when targeting terms. Go for the ones that are going to convert!