Selecting the right keywords is without a doubt one of the keys for a succesful Search Engine Optimization strategy. No matter how well it is done, SEO won't result on increased sales and conversions unless the keywords are likely to draw large amounts of high quality traffic. When evaluating what can be a very long list of keywords, the three main factors to consider are the estimated amount of traffic, the competition and the quality of that traffic.
Monthly search volume
Most if not all keyword research tools are able to tell you how many monthly searches a keyword has in average. If yours doesn’t, it may be time to find a different one or use the free Google Keyword Tools, since the estimated search volume is probably the main factor to consider when selecting keywords. If a keyword doesn’t have enough monthly searches it won’t bring in enough revenue, no matter how low the competition and how high the potential conversion rate. Some reasons why your initial keywords may not be as popular as you wanted them to be are using too specific long tail keywords (“Small web development agency in London”) or using words that aren’t actually used by your target audience even if they are popular on business circles. However, the monthly search volume is just the first factor to take into account, so don’t immediately reject any keyword that isn’t heavily trafficked.
Competition
You can check the competition for a keyword by doing a search for it on any search engine, using quotes to match the exact keyword. Chances are, the most searched for keywords are also the most competitive. Take a look at the first page of results, and think if you can do better than your competitors. For example, if your competition is a giant online retailer with thousands of pages and links, optimizing for that keyword may be a lost battle for the start. In some cases, competing for high profile keywords may not be advisable, since it would require too many resources. Try to achieve a balance between the competitiveness of a keyword and its potential value and remember that sometimes it may be better to focus on several small volume keywords instead of a very competitive one. The amount of traffic you receive may be higher just because you have higher chances of having a bigger share of it.
Quality of the traffic
It’s easy to get carried away looking at search volume and competition, and forget what is probably the most important factor when selecting search engine optimization keywords, the quality of the traffic they send. Unless you are interested purely in traffic because you sell advertising space on your website as ad impressions, there’s something on your website that your visitors need to do in order to make money. That is called a conversion, and some keywords are more likely to bring in traffic that converts than others. Choosing keywords with low traffic and low competition but very high conversion rates can make your SEO strategy extremely effective. However, there’s no real tools that will tell you the conversion rate of a keyword, so you’ll need to find out based on your website statistics and your knowledge of your audience and niche.
By achieving a balance between search volume, quality of the traffic and competition you can fine tune your keyword list to be as effective as possible. While SEO is a long term investment, selecting the right keywords can mean the difference between getting results in weeks or months, specially on niches with heavy competition. And since those three factors will change over time, it's advisable to check the metrics of your keyword list regularly and adapt your SEO strategy accordingly.