You know local search is important, and you’re smart enough that you’re able to follow the instructions and set up a local business listing just fine on your own.  But is “just fine” good enough?  How do you set it up in the most effective way possible?  It’s an important question, because as is the case with so many business tools online, there’s the fast/easy way to do it, and then there’s the correct/effective way.  The two are very different, and they produce very different results.  For what it’s worth, my strong professional opinion is that if you’re going to do the job at all, you should take the time to do it right.

Here are seven things you can do in the next hour or two to get your local search listing showing better on Google (or Yahoo; much of the terminology I’ll use here will refer specifically to Google Places (previously called Google’s Local Business Center) specifically, but the principles apply to Yahoo’s Local Advertising program as well):

1) Create a unique listing for each business location.

This only applies to companies that have a number of stores, branches, etc.  But it’s important enough to mention here, especially because I see so few businesses taking proper advantage of the fact that you’re allowed to create as many local listings as you want.  Since the city or town for which you provide a physical address will be the city where your listing is most eligible to rank, it’s essential that you create a unique listing for each unique business location in order to maximize exposure.

2) Think about not just where your business is located, but also where your customers live.

Let’s illustrate this one with a hypothetical:

The situation: You’re a veterinarian in Carmichael, CA., a suburb of Sacramento. Though your practice is in Carmichael, you know that a lot of your clients live in Sacramento proper.  And since Sacramento has so many more people than Carmichael does, you very sensibly would like to appear in local listings for searches like “sacramento veterinarian” (or for searches that aren’t modified with a city name, but occur in Sacramento and therefore are eligible to trigger local listings).  Good thinking, way to go!

The problem: You need to have an address within the major metro area in order to ensure local rank.  The closer you’re located to the centroid (major city), the more eligible your local listing is to show.  Google is smart enough to allow for certain exceptions to this rule based on location, industry, and keyword.  However, while Google may be more flexible in certain situations, the specifics of how flexible they’ll be, and in what particular situations, are vague at best.

The solution: Google has recently addressed this problem in their recent Local revamp. Now, rather than only being able to submit an address, business owners can choose instead to define a geographic area they serve. Additionally, home-based businesses can make their address private. This eliminates the need to set up a P.O. Box – a maneuver that will ensure you a spot on the Google Places blacklist.

3) Pick your business categories wisely.

Search engines are all about providing the most relevant results to each search query.  The business categories you select in your listing are one of the things Google looks to first to determine what searches your listing might be relevant to.  Give yourself a better chance of appearing often (and on searches that indicate an actual high-potential customer) by choosing your categories carefully.

The Local Business Center lets you both select from a weirdly limited list of preexisting categories and create your own.  You have to include at least one category that matches a preexisting one, so start by typing in different ways to describe your business until you find the category that matches it best.  Make that your first category selection.

But don’t stop there: take advantage of the fact that you can add up to five categories.  When adding the other four, think in terms of target keywords: What words or terms are high-potential customers most likely to be searching on? Include those as part of your custom category—or even as the entire thing.  If you use Google Analytics (and if you don’t, you should), you might look through some of the search engine reports to find keywords that are bringing in healthy numbers of quality organic visits.  Or, if you’ve ever advertised through AdWords, you might find some useful keyword information in the data there; remember to think in terms of not just which keywords drive traffic, but also which ones convert.  Your best keywords are those that do both.

A few things not to do: Don’t use a geographic modifier in any of your category fields—it won’t help.  Don’t list multiple phrases/keywords in a single category, as they’ll dilute each other’s value and effectively cancel each other out.

4) Do not include a keyword in your listing title.

If you had asked what tactics are the most effective for showing up in local search two months ago, adding a keyword in your listing title would’ve been a suggestion at the top of the list. 60 days later, this is no longer the case – Google is now blacklisting users who try to gain a ranking advantage by including words other than the actual business title itself—especially if those words are unrelated, or only loosely related, to what the business sells. This includes services/products provided, regions, descriptive characteristics, etc. For example, if you have a petsitting business called “Paw Pals Inc.,” make sure that that is the exact title of your business listing (not “Pet Pals Inc. Petsitting).

While this is a relatively new rule, we’ve heard from the horse’s mouth itself that Google’s MapSpam team is expanding rapidly, so violations like these are less likely to fly under the radar in the coming months.

5) Build a large network of relevant citations.

Maybe the most interesting factor influencing local search rankings, and one of the ways that local is very different than traditional SEO, is that link quality matters less than link quantity.  In the local search algorithm, a link from an authoritative site counts the same as a basic citation on any old indexed site—as long as the citation includes your business name, address, and phone number.  Unlike the traditional search algorithm, citations aren’t viewed by the local algorithm as a “vote” to your site, but instead as merely a validation that you do in fact run a legitimate business.

Make an ongoing project of creating a large number of relevant citations about your business online.  Submit your listing not only to the major, obvious directories and authoritative local sites (Yelp, CitySearch, Yellowpages.com, etc.), but to smaller directories as well—especially ones that are relevant to your industry or local community (think: santamonica.findlinks.com).  Rand at SEOmoz has already posted a great step-by-step for how to go about doing this, effectively saving me the effort of explaining it here.  Yippee!

6) Foster a network of well-optimized reviews.

Reviews matter in local search rankings.  The more reviews that validate your business location, the better.  While their influence fluctuates by both industry and search engine (in Yahoo, for example, you need to hit a certain threshold of reviews before they start affecting rank), the quantity of reviews included in your listing certainly plays a role.

Reviews are also valuable in terms of keyword strength; the more your reviews include a particular word or phrase, the likelier your listing is to appear on local searches for that term.

And to take a step back and look at the larger picture, reviews build your brand and directly influence potential customers’ buying decisions—either positively or negatively.  Glowing reviews create preemptive trust.  Negative reviews turn customers away.  Like it or not, gone are the days when a business could operate under the radar; these days, information is too easy to share, people are too eager to share it, and user-generated commentary on Yelp, CitySearch, etc. takes front and center on the local business competitive stage.  To really thrive you have to accept that the online world is a constant feedback loop, an organic conversation that you can’t control.  You can pay attention to the conversation and learn from it, use it to your advantage, chime in when appropriate; but at the end of the day, the only way to earn a good reputation online is by running your business honestly and well.

Build as many positive reviews as you can, through sites like Yelp, CitySearch, and InsiderPages, as well as local review sites.  Ask happy customers to write a review; post a “People Love Us On Yelp” sticker on your storefront or checkout counter.  In terms of local search ranking, it’s okay to have some negative reviews too; quantity of reviews and frequency of keywords in those reviews are what matter if all you’re concerned about is local search exposure.  But again, the importance of positive conversations about your business online can’t be overstated; its influence on your long-term bottom line goes well beyond anything well optimized local search listings can do for you.