SEO stands for Search Engine Optimization. SEO improves your ranking in search engines. The ranking is what position your website shows on the page and what page it's on.
Data has shown that overwhelmingly, people skip ads and click on the first unpaid result shown. The person who's able to achieve that position is going to outperform everyone else, in everything else. A good rate of conversion and high ranking means you make more money. That's only possible through SEO.
Search Engine Optimization relies on a variety of factors including keyword usage and density, the speed of your website, mobile usability, and the appropriate use of headers and meta tags. Your competition matters too. If you're trying to rank for a specific city or phrase, you're compared against those who already rank for that city or phrase.
The date a website went online correlates with ranking, with older websites generally ranking higher. Likewise the number of backlinks, or links to your site from other websites, also affects where it lands in search results.
It's important to understand that SEO is an ongoing process. Even once the desired ranking for a result is achieved, it requires maintenance for your website to stay in that position. This is in part due to competition, but also inherent to Google's algorithm itself, which rewards relevant and updated content with higher ratings.
Important, too, is to understand that because SEO is competitive and ongoing, sometimes significant results can take months to show. This depends on things like the density of the keyword you're trying to rank for, or what the competition looks like in the local market share.
To learn more about SEO, check out some articles we've written on the subject, courtesy of the blog. It goes over a more detailed explanation of SEO and its principles. It also talks about the average price of SEO for a small business.