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I live in an area where there are two cities of 60-90k people adjacent to each other. Due to Google's apparent emphasis on physical location of a business when it comes to SERPs for local queries, it can be difficult for a business to rank for searches which include the neighboring city's name (going both ways, although it seems that searches including one of the city's names are quite a bit more common than the other).

How can a business effectively rank well for queries including either city name, when said business operates in both cities but only has an office in one location?

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It's very tough to rank in Google's local search results for place names where you are not physically located. Typically the strategy is to steps is to boost your traditional SEO presence, or to move your business location. Here are some steps that you can take to outrank the competition, as wel as some good descriptions of the problem.

  1. Create unique landing pages for each location
  2. Have the complete address and phone number for the location listed twice - once for humans, once for robots
  3. Use relevant internal links
  4. Get a new location closer to the centroid that Google Maps is using for your business
  5. Get inbound links from other locally and topically relevant sites
  6. Generate positive reviews for each relevant location page

Google's take on local is that it is address-based. Thus, if you have an office in San Francisco, you can create a Google Place Page and shoot for rankings in San Francisco, but not in neighboring Oakland, Berkeley, San Jose etc. Google's picture of Local has proved problematic for all go-to-client businesses (lawn care, tree removal, nannies, chimney sweeps etc.) because there is a genuine bias towards those businesses which at least operate out of their own storefront or at least within their own town. Service area businesses receive less specific solutions from Google Places.

[Creating additional content] is the strongest move you can make towards improved visibility for these secondary terms. After this, all traditional off-page SEO tactics apply (linkbuilding, Social Media, etc.)

As you mention, it is very tough (if not impossible) to come up in Google Places for a neighboring town. I know this for a fact because I am currently working on SEO for a small business here in Texas with about 10 neighboring cities. The best I have been able to do is get them in top 10 SERP's organic results for neighboring towns. And Top Google Place and Organic results for their actual town listed in address when searched.
I have had some success by placing neighboring cities in title text and in page content while keeping content flow as natural as possible. This did work for a few of the company's neighboring cities in organic results.

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Thanks for the info and the links. Lots of good material there. Do you think setting a "service area" makes sense for a business that isn't a storefront, but isn't a traditional service business like lawn care, plumbing, etc.? In this case, it's a commercial real estate brokerage that also provides property management and related services. –  tnorthcutt Jan 3 '12 at 15:47
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Yes. "A business owner may add service areas to a new or existing listing if his business model requires him or an authorized representative of his business to travel to his customer's location." support.google.com/places/bin/… I think property management counts under this definition. –  Ciaran Jan 3 '12 at 15:52
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