Since the beginning of time, well at least the beginning of the online world and Google, local search has been evolving through it's algorithms which has proven to provide incredible strength to local businesses rankings in Google. As Joe noticed a couple of weeks ago, it appears that Google is continuing to test their algorithm that may result in local listings being ranked above other search results. If this is the case, then we should be taking advantage of this potential change by applying the techniques that Google uses to measure our sites.
Title tags and anchor text have always been considered an important factor for general SEO as well as local search. These tags should include information about who you are, what you do and where you are located. Anchor text is also important, especially on locally relevant sites, as keywords such as products or services can help attribute what it is that you offer and help target your target audience.
Citation was first noticed with Google started to provide Map listings that displayed several locations for a particular search term. Citation is when Google gathers information from all over the internet to find out about who you are, where your company is and what your company does. So if a relevant site mentions these details, Google can review this information and provide a listing for you, even if you don't have a website. We still see the affects of Citation to this day when there are Google+ profiles set up due to information gathered from directories such as Yellow Pages, True Local etc.
Reviews is also a major signal for local listings because at the end of the day, Google is trying to provide users with the most popular businesses in a certain category in a particular geographical region. Reviews provide information on how popular a business is and how beneficial that business is to Google's users according to the search term.
It isn't as strong as the other signals yet, but David Mihm from SEOMoz predicts that the strength of social interactions on Google+ may play a huge role in the algorithm in future. Factors such as a businesses circles and how many people follow that page can also be an indication on how relevant a business is to users.
Local search listings has immense potential and it is something that the SEO world should be taking more seriously for increased rankings.