There's no instant answer on this one, but consider these points:

1. What keywords are you basing your concern on? The 'vanity keywords' you find in the Head of the keyword continuum, or the 'sanity keywords' — the worker bees that often do much of the real productive work and which can often be found in the Long Tail?
2. On the same theme, while it's generally true that higher rankings = higher traffic, remember that conversions — shopping baskets, sign-ups, brochure downloads, email leads, whatever you're using as a success metric in your Analytics — are the real measure for most websites.
3. And again, do you know how your competitors' Search Marketing ROI (Return On Investment) compares with yours? (10% of UK companies have no ROI tracking in place at all, and a whopping 65% measure using click-and-visitor metrics. Ask for more info on how companies track online ROI in the UK.)
4. Are they spending more than you on Natural Search? Are they spending it more wisely? Consider this: a company may spend 80% of their online marketing budget on Paid Search — after all, it "gets the message up there quickly" — and then wonder why their Natural Search rankings are a little disappointing. The average spend on SEO is around 30–35% of the overall Search Marketing budget: we can tell you more.