Four basic benefits of SEO
This is what we all want SEO for, right? Well...no. Rankings are an important part of SEO, they are not the goal in and of themselves. Too many people look at rankings and think "I'm losing x amount of business because I'm not ranked #1. This may or may not be true. Different rankings produce different bounce rates. It's important to understand that rankings don't make sales, they just provide a way in the door, and those that come in at #1 may not be as ready to buy as those that come in at #5.
Once you start getting rankings, even for low-volume but important keywords, you'll start to see your visitor count rise. Again, this is good, but not the ultimate goal you're trying to achieve unless you get paid on a cost per impression basis.
This is the big goal. The end-all, be-all purpose of search engine optimization. SEO is more than just helping you get rankings and drive traffic to your site. It should also help you increase your conversion counts and percentages. A conversion can be anything you want it to be; a comment on your blog, a download of a white paper, a follow on twitter, or a purchase of a product. Its important to know what your conversions are so you can set your optimization goals to help achieve them.
Search engines are stupid
Throughout the process of SEO it's important to keep in mind that the search engines, as smart and advanced as they are, are still pretty stupid. They can't tell the intent, so if intent is needed in order to determine relevance of a page or keyword, the search engines are unaware. Part of the SEO process is going out of your way to spell things out to the search engines so no guessing is needed.
Keep in mind visitors can also be pretty dumb themselves. Business owners are always complaining about calls they get asking for information that's clearly noted in the website. Of course, it's not that your visitors are really stupid, it's that they are impatient for things that are not easy. The harder your site is to navigate, find information, make a purchase or get that conversion, the more likely the visitor is to leave. They'll move on to another site where things are easy.