As local results become increasingly more important in search, how can you compete against other locations in neighboring areas? Well, according to Google’s Matt Cutts, you really can’t. But, that’s the point. That a local vendor would show up in a user’s search made from their hometown over yours in a neighboring area. But keep in mind, these local search results only prioritize Google Place results.
Claim your Google Places “place”. Optimize it. But then focus on standard search optimization methods and Google Adwords to gain the site traffic you want.
Of course, Cutts does make the disclaimer that if you are a mobile vendor – in a service industry that is constantly driving around making calls, you can specify a 50-mile radius of your “locality”.