First, the SEO service provider needs to know how your website is performing in the search engines results pages (SERPS) for your target keywords (The keywords for which you would like to appear in the first positions). There are several tools on the market that will do a pretty good job on that matter.
This being done, the SEO service provider will analyze your website's stucture and pages and see if they are search engine friendly.If not, The SEO service provider will make some recommendations on how to improve your website spiderability and make it more search engine friendly which often means also more user friendly.
The service provider also wants to know which pages of your website have the highest number of incoming links: these pages are the most important pages of your websites and you don't want to loose the benefit of incoming links. Some tools (including the Google Webmaster tools or the Bing Webmaster Tools) provide reports on the number of inbound links to your website and website pages.
The SEO service provider will most probably recommend that you're website URL's be rewritten to more friendly URL's. He will provide you with a document containing a list of your website's best performing pages (in the SERPS & pages which have the highest number of backlinks), the current URL's of these pages and the rewritten URL's which should be easier to read by the search engine spiders and contain at least one of your target keywords.
The rest of your target keywords should be evenly and wisely distributed in the during the page optimization process: your target keywords should appear in the title of your pages, in the H1, H2, H3, etc, in the website navigation, in the content...and to me, this is one of the most important aspect of a good search engine optimization job:it's one thing to know the best keywords and the best performing pages, it's another thing to know how to use that information effectively.
Now, You want Google and other search engines to know that the current page URL's will become the new rewritten and search engine friendly URL's. The current URL's should be removed from the search engines result pages but you want the new pages to keep the authority and benefits (in terms of pagerank and inbound links) of the corresponding old pages. Your SEO service provider will tell you how to implement what we call a 301 redirection. (search engine friendly redirection)
When all the recommendations are applied to your website, your provider will run an error check to make sure everything has been done properly and the new pages effectively receive the same traffic as the old pages. Actually they should receive more traffic since they are optimized but it takes a while before Google, Bing and the other pass the pagerank information (and benefits) from the old pages to the new pages. Be patient and have faith: if you've done things right, it will pay off soon enough.
When every pages and changes have been checked for errors, you will want to generate a new xml sitemap to complete the job. Remember that the sitemap will not help your website rank better in the SERPS: I believe that with a good navigation and site structure, you don't even need a site map (and your users will love it!)
Some SEO packages include a link building service varying from manual website submission to some well known web directories (DMOZ, Yahoo!) to more advanced submissions to a wide range of web directories. This process often makes use of software for automating hundreds of tasks so you could get a link to some directory that you don't even care about. Link building strategy is much more than that. Don't think about a link building campaign for improving your search engine ranking results. A good link building campaign should aim at building your authority and reputation on the web and through the social media networks.
So, now that you have a search engine friendly website, you should be able to see the difference just by looking at your web analytics reports. A good SEO package should include some reporting on how your website is ranking for your target keywords before and after the optimization process. Those reports can also show you how your competitors rank for the same keywords. Depending on your budget, these reports can be simple or more advanced but you've got to have at least a simple one. Do not stay in the dark! At this point, you will look at your web analytics software like you never did before and start wondering what a web analytics consultant can do for you.
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