Selecting the right keyword is crucial to attract free relevant traffic to your web site. Your organic traffic and revenue will suffer if your web pages are optimized for the wrong keywords.
Here are a few good sources for keyword research.
Ask your customers how they search for you and which keywords they use.
They know better than anyone else how they search!
Read through their web pages and try to find common words related to your business.
Competitors web sites
Browse through your competitors web pages and data mine keywords.
Look in pages with relevant content and look in the TITLE, keyword and description tags.
Also read through the headings and body text for keywords.
Study related resources for keywords
Read through articles, web pages, newspapers and other sources related to your industry.
Identify relevant words and phrases that are mentioned frequently.
Use a thesaurus
A thesaurus is of good help to find related words. I have found many of my best keywords by looking up words in a simple thesaurus.
Check your log-files
Your log-files can be a real goldmine for keyword research so take your time to read the log-files carefully and look for relevant keyword phrases.
Don't ignore keywords with only a few hits if they seem relevant. Not ranking well for the keywords might be the reason for few hits. Your traffic from these keywords might skyrocket if you optimize your web pages for them.
Free keyword research tools
Google provides a free keyword research tool if you sign up with Google AdWords. It gives you a fair estimation of search volumes and suggests keywords.
Yahoo search marketing also has a free tool you can use for keyword research. The tool also provides information about search volumes.
Keyword Research Software
This is the way to go if you are serious because you can get hundreds of highly relevant keywords suggested within seconds. A good keyword research tool can help you cut down your keyword research considerably and you obtain much better relevance.
Specialized keyword research software's provide fairly reliable information about search volumes and used keywords because they analyze statistics from search engines to predict search behavior on the internet.
WordTracker is known to have a very clean database and to provide a fairly accurate representation of actual web traffic. WordTrcker also provides lateral and thesaurus searched which means they will return many keywords like "budget SEO" if you search for "affordable SEO".
Keyword Discovery is similar to WordTracker and has a few more features and a larger database. It offers historical data so you can predict the traffic for specific Christmas related keywords in December.
Keyword Elite is a fairly new software for Keyword Research that complements WordTracker and Keyword Discovery perfectly. Read the Keyword Elite Review.
I recommend you buy one of these keyword research tools. Personally i use all three because i find keyword research is such a fundamental part of an online business.
Keyword research services
There are companies that specialize in providing keyword research services. A good keyword research service provider will explain the thought process and why the specific keywords are selected.
It might be a good idea to buy a keyword research service from a reputable company the first time just to learn how it works.
Do not buy keyword research services from a company that won't give you a good explanation and background information why a specific keyword was chosen.