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More traffic leads to more people linking to the site, which hopefully leads to better ranking.
I'm not expecting that the redesign *in itself* will lead to better ranking, but that it will indirectly promote better ranking through encouraging more links. That's the plan, anyway.
Good luck to you, and let us know how it turns out.
When the company I work for inherited the site and the task of doing a re-design, I suggested that we keep the static HTML pages, and only make very minor modifications. We kept the same URL's for the pages, and made minor modifications to title tags, <h1> tags, etc.
I was very worried that the entire site would lose its rankings, and told the client that this was a very real possibility.
Fortunately, the existing static pages held their rankings. We've added more static HTML pages, and those have done well in the rankings.
The pages that were completely redesigned are still struggling a bit. But nearly all of those pages are dynamic, and have long query strings in the URL's.
I think this is a scary time to be doing any redesign
If you redesign a site (retaining the same URLs) and make it easier for the search engines to index the information therein the effects will almost always be positive. Not dramatic, but positive. This should not harm your rankings in any way.
I have revamped sites on probably about ten occasions and it has never caused a problem. This is not theory, this is experience.
I have a site which last had a major revamp during the Florida mishap as we had nothing to lose at the time. It's designed using tables for structure and although (I think) the site still looks good and works well there will come a time when we have to change it for accessibility reasons. We should do it now really but have #1 rankings for the most important search terms in our market.
The problem is the leap in the dark that you have to take when doing this sort of thing. Some of our competitors have already brought their sites up to scratch and seem to have done OK in rankings but they still have not knocked us off top spot.
This is a major dilema and it would be very helpful if Google took positive steps to encourage changes for the right reason.
Part of the reason for this increase in traffic is a wider focus on keywords but also more pages on site increases the links pointing at the home page and other pages and thus more PR.
We are applying css, adding keyword phrases for our niche, updating content, eliminating keyword repetition in titles and h1 tags.
Applying css does not appear to have had any result on serp's but will be big dividend in maintenance. We update every page once a year with new pricing and features.
Adding new keyword phrases has helped significantly for those keyword phrases. This was done in conjunction with eliminating duplicate titles.
Some improvement for existing keyword phrases. More lower level pages showing up in SERP's. Gains vary from no gain to many positions in SERP.
Updating content was more of a defensive move to keep our lowest level pages from going supplemental. Almost all of our individual product pages are indexed.
Bottom line is we will spend lots of money this year so we will be better positioned for future years. We won't get our investment back in increased sales this year.