Pat Flynn's Keyword Research Method

So I've watched a video by Pat Flynn where he disclosed his method of researching and qualifying his keywords. He states that the ultimate goal is to create an online resource that is valuable to the market or niche that we target. He set a few criteria for qualifying a keyword as follows:

1. The keyword should have at least 3,000 local monthly searches.
2. Low competition in Google.
3. Does it pass the Grandma Test. This means that if I get incredibly famous for the niche that I am in, will my Grandma be proud of me?
4. What is the earning potential?
5. The 50 post test. Can I imagine writing 50 posts around this keyword?
6. Is it possible to create an in depth high quality post within this niche that can create a buzz?
7. Can I help people within this particular niche?

To start off, you would have to sign up for Google Adwords to get access to Keyword Tool so that don't have to fill in Captcha and get up to 800 results.
Head over to Seomoz and sign up for free account to gain access to Open Site Explorer for research on backlinking as well as Moz Rank which is a better indication than Google PageRank to see how much authority a site has.
Head over to SEMRush for good analytical data on keywords and competitor's website.
Go to Keyword Tool and key in your seed keyword. Create filters for Local Monthly Searches greater than 3,000 and less than 100,000 and Approximate CPC at $1.00. Match types set to Exact. Then click Search.
Take each keyword one by one and explore them. They have already met search volume criteria. Think about criteria No 3, 5, 6 and 7.
Once you find one which is interesting enough, take the keyword and search it in Google to see if anything stands out right away. Look out for ads, if there are none, it may not be a good money keyword.
Check if there are any products to sell by placing the keyword in inverted commas and adding a money word such as price or affiliate.
When searching the keyword in Google also pay attention to whether the sites on the first page makes use of the keyword in the Title, Domain and Description. If not many people are, then it would make it easier to optimize your website to get it to the top listing.
Also check what kind of brands are there and what are they selling or doing.
If your keyword is location based, try to avoid keywords that have Google Map results because the location results uses up a few placing on the first page and limits the room for listing.

Once you have a good keyword, head over to SEMRush and search there for your keyword. Phrase Match Report gives you great secondary keywords that you could write posts about or another new seed keyword. Organic Results shows the top twenty spots in Google and you could open the sites directly from SEMRush to see what the websites are all about and what we have to do to outrank them.

Copy the URL of the top site and put it into Open Site Explorer from SEOMoz to check out the Domain Authority, Page Authority and Backlinks. Page Authority is more important. Anything in the 20s and below are easy to outrank. Also check out the number of links, the more they have the harder to outrank, best if they are less than 200. Do this for all ten sites from the 1st page of Google. Page attention also to the Page Authority of the linking Pages.

Grab all the URLs into a text file and go to SEO Rank Smart under SEO Tools and use the Bulk Pagerank Checker by pasting all the URLs to check all the page rabks of all the sites. If there are a lot of 3, 4 or 5 it may be difficult to rank for this keyword.

Go to Moonsy to check for the MOZ Rank of each site. MOZ Rank between 2 and 4 is ok. Anything above that is hard to outrank.

If you'd link to watch the video yourself, here it is. Set aside some free time, it is 53 minutes long. [youtube=http://www.youtube.com/watch?v=cdr1b4J2EjM]]