Choosing keywords is one of those areas that can cause confusion when optimizing your website. What I discourage is the “shot in the dark” approach to picking out target keywords appropriate to your site and goals. Unfortunately this is what a lot of small companies do- rather than researching and measuring according to their business goals.
One great tool that I’d like to mention is Google’s “Insight for Search“. Using this search tool you can do search comparisons for your target keywords. If your site is only geared towards certain locations you can filter out the irrelevant areas. You can also search using different dates to gain “insight” into how searches have changed. This can show you help to steer you in the right direction for targeting keywords and keyword phrases for your site.
Results. Put in a couple of keywords, choose the year, location and look at the results. You’ll find that there is an index shown for each keyword. If there’s enough volume for the given results, there will be related keywords shown as well as ‘rising’ searches. I would pay attention to the rising searches because that can indicate the direction that certain keywords are heading. It may add insight into certain keywords that you’re missing similar to “keyword suggestions” found in pay per click(PPC) advertising programs.
Using Insights for Search is indeed insightful not to mention fun! compare related words, see what region has the highest searches, what phrases are moving up in popularity, and then tweak your site accordingly!