I think you might have the right idea, but you may be a little confused about the terms you're using.
SEO is Search Engine Optimization. It's what you do after you've selected your niche and product. SEO is about using the right keywords and structure in your content and your webpage design, and then also about the content and backlink anchors you use when promoting your site or page. So there's really no way to do SEO at the step you have it placed in your plan.
I think your point is that he needs to include niche and keyword research into his plan, which is absolutely correct. To do that he just needs to expand his step 1 to include keyword research and add the use of those keywords to his step 2 and 3.
- a- find a clickbank product that pertains to a certain niche
b- do keyword research to find the best search phrases to target (optimize for).
- make a website or page (optimized for the selected keywords) and link to the particular product
- do SEO and get the site or page ranked well (for the selected keywords).
If you don't have a particular niche in mind at the start then you can reverse the order of 1a and 1b,
- a- do niche and keyword research to find a good niche and search phrases to target (optimize for).
b- find a clickbank product in the selected niche that will fit well for the keywords selected.
- make a website (optimized for the selected keywords) and link to the particular product
- do SEO and get the page ranked well (for the selected keywords).
