A good SEO strategy is geo-targeting specific locations near where you do business and optimize your website for these keywords. With geo-targeting you will be expanding your websites pages, by adding new pages specific to city, state, county, or zip code where you do business. Each page should be geared to a specific area. Do not make one page listing hundreds of cities. This is not good and will confuse the search engines. Instead, create a new page for each city, create unique content related to that city on the page. Remember to change the page title, meta tags, headers, etc. to include the city specific keywords.
For example, if I was selling widgets to people located in Santa Cruz, California then I would add some new pages geared towards cities within a 50 mile radius of Santa Cruz, California. I would edit the pages title to read something like “XYZ Widgets Store in Santa Cruz, California 95060”. I would then optimize the rest of the page to fit this title and ensure that the proper keyword density is achieved. This is how geo-targeting applies to search engine optimization techniques.