How can I ensure that I’m hiring the right/a good SEO vendor/agency?

You should interview a potential agency in much the same manner as you might interview a candidate for F/T hire within your organization. So many folks are quick to compare two agencies based upon the deliverables listed in the proposal and the price. They fail to remember that – at the end of the day – you’re hiring “people”. You would never do this if this were a F/T hire. You would want to review their resume, of course, but you wouldn’t just take their word that they did everything listed on the resume. You would want proof. You would want to speak with references. You might also want to make sure that, culturally, there is a fit. No sense in entering into an agreement with an agency when you don’t even like them.

Before you even begin to shop agencies, you should have to determine some of the areas where you know you are weak, as you’re hopefully finding an agency that can offset weaknesses and mesh well with the team that you do have, in-house. If you’re lacking in content, and you have no copywriter, this might be something that you’ll want to understand from a potential agency (can they supply content? Is their content good? What is the process?) before you commit to an ongoing relationship. If you have no technical staff (no IT), and you’re expecting the SEO firm to manage those areas of your business, you should find out how recommendations would be implemented. Again, it’s vital to think beyond the stated deliverables and pricing in a proposal.