Local SEO is name of the game right now. If you have business, chances are that you also have a local presence even if you operate from some office. You MUST optimize your website locally. Not that you can get more local traffic and get more local customers, it also helps you overall SEO because local SEO depends on local links, citations, and reviews all of which are also helpful in improving your overall SEO. Links as we know for the longest time have been helping sits with their pagerank, authority, and keyword ranking, citations help with overall popularity and help search engines better rank the website content and reviews help with overall trust and popularity.
Below is a nice video by Rand from SEOMoz about local citation. It seems that they purchased a new comany, Getlisted.org, which is a big localseo player. Anyway check out the video for yourself.