I cannot fathom why you would give a client a rank tracking report.
I love rank tracking reports when I'm dealing with corporate clients. I don't use them for everyone, but there are benefits in certain situations:
-When you first get started with a client, you're probably not going to rank number 1 overnight - especially if the domain you're working on is relatively new or untouched in terms of linkbuilding. Ranking reports do a great job of showing growth before there's a significant effect on traffic and leads/sales.
-Sometimes, clients want to rank for phrases that don't actually do much for their business (either in terms of traffic or conversions). As much as I hate to be an enabler, I'm probably not going to turn down a lucrative offer, even if it IS a little silly for them to want that keyword (or set of keywords) so badly. In these cases, the ranking report is all that really matters.
-Psychological benefits. Clients, especially corporate clients, love shiny charts and graphs, and ranking reports are a great visual display of improved results. I emphasize them much less after they're ranking for all their keywords and the graph levels off.
-Clients expect them. If they've worked with other SEO companies, they have probably gotten used to getting ranking reports and they may feel it's important.
There are weaknesses to using ranking reports, sure - but they're not totally useless. There are also weaknesses to just showing people the increase in organic traffic or conversions. I'm often hesitant to do that because it only shows the benefits you've given them THAT month. Realistically, any good SEO is going to provide a service that continues to deliver some level of results for months or even years after the service is discontinued - but when you show them the current traffic benefits, many clients have a tendency to fixate on that and lose sight of the long-term benefits. Traffic/lead counts can also be a poor metric in highly seasonal businesses, since there may be work to do to maintain the rankings even in the low season when fewer leads are produced.
Personally, I like to customize the approach based on what's going to show the best view of the things they value. For some people, it's rankings. For others, it's sales/leads or total organic traffic. Most of the time, I use a combination. For e-commerce companies that frequently add in new products, I'll even add in some kind of "domain strength" measurement because it's important to show them that they're not only getting rankings for current products, but that I've helped build up their site to the point that new products will rank faster than they otherwise would have.
As for tools, MySEOTool.com isn't terrible. It's simple and colorful, and you can tell it to use or ignore Google Places results. Whatever you do, though, don't make a login for your clients unless you want to get a phone call every time their favorite keyword drops 1 position for a day.
