SEOmoz.org just posted a good set of questions to understand if you really know how search engines work. If the people performing your SEO cannot answer these questions, you need to think about possibly changing companies. Most of these questions are pretty basic and any SEO person should be able to answer 90% of these questions off the top of their head. The Bonus question does require some thought.
Answer these Ten Questions Before You Charge for SEO Services from SEOmoz.org
What four search engines comprise 90%+ of all general (non site-specific) web search traffic?
Explain the concept - "the long tail of search."
Name the three most important elements in the head section of an HTML document that are employed by search engines.
How do search engines treat content inside an IFrame?
What resource and query can you use to determine which pages link to any page on SEOmoz.org and contain the words "monkey" and "turnip"?
What action does Google threaten against websites that sell links without the use of "nofollow"?
What is the difference between local link popularity and global link popularity?
Why is Alexa an inaccurate way to estimate the traffic to a given website?
Name four types of queries for which Google provides "instant answers" or "onebox results" ahead of the standard web results.
Describe why a flat site architecture is typically more advantageous for search engine rankings than a deep site architecture.
BONUS (Answer this one and I'll be very impressed): Name twelve unique metrics search engines are suspected to consider when weighting links and how each affects rankings positively or negatively.
I would suggest visiting SEOmoz.org and reading up on what the whole SEO and SEM game is about. The more knowledge you have as a customer will filter out the suspected 70% of bad companies out there. It seems like there are many folks out there trying to basically rip people off.
It looks like we will get the answers to the questions tomorrow.
Be sure to check out Search Marketing Education Has a Long Way to Go - 5 Examples from the Field on SEOmoz also. This is a great entry on how many of these SEO companies are not acting in the best interest of their clients. SEO is not some "trick" or black magic to fool the Search Engines. No one can guarantee a #1 ranking on Google, Yahoo, MSN or Ask. If a company gives you any guarantee, run to the next company, because the one making the guarantee is not going to be worth your time.