Here are my ideas:
1. It really helps if you have a strong example, like the massage therapist here in Vancouver whose business went through the roof when the SEO consultant was able to persuade him away from focusing on "massage therapist" and to focus instead on "pain relief" and "stress relief" keywords. He had to move to larger premises and hire several more therapists. True story!
2. Be very firm and very sure of yourself when you discuss SEO with them. I find that some of the people who resell my services lose business or let the client lead them down the wrong path because they are too mild-mannered, low energy, wishy-washy, self-effacing or lacking in conviction when they talk to the client. I know this because they tell me what they said (to my horror, usually), plus, I know how they speak to me. Cultivate a strong, confident voice. A strong, confident voice alone can often win the day.
3. Don't let the client control this important conversation. Take and keep the lead.
4. Don't be afraid to disagree with them... strongly and confidently.
5. Make sure the client understands that you do have their best interests at heart. You want them to be successful. "Jim, do you want to succeed or fail at this?" Pause and wait for the answer! Don't speak! He will say, "I want to succeed." You say, "Okay, then we really do need to do it my way."
6. Ask questions like: "Where are you getting your research information?" "How much research have you done on this, Jim?" "Why do you think this will work?" The questions aren't so important. It's their answer that you want. They won't have done anywhere near the research you've done! "Jim, I've been doing this for ten years. I've got testimonials to attest to the fact that I know what I'm doing." And so on...
7. Use the "we" word. I try to include my clients as part of my team. "WE'll need to do it this way if WE want to succeed." (I wasn't going to put this tip in, but it works really well with many clients. They realize that you don't want to fail, so you are invested in them succeeding. It somehow changes the whole conversation when you're both on the same side.)
8. Give them the contact information for one of your clients who listened to you and did well as a result. Get your client's permission first, of course! (For the clients who don't believe your true story in #1!)
9. For the more stubborn clients, I would tell them to come back in 3-6 months and have the SEO discussion with you again. They should be far more willing to listen when their site hasn't brought them any business doing it their way. (These people can become your best customers and your most fervent cheer leaders!)
10. Take the job anyway. You still get paid for your design work and you've warned them about the SEO issue. Don't agonize over it.