A post last year from Google's Lat Long blog attempted to explain in greater detail how exactly local search ranking works. It zeroed in on three specific factors that would determine your spot on local search rankings when area users searched for your services.
Specifically, these signals are distance, relevance and prominence.
For example, if your business is within the vicinity of a person searching for your services, your company (if properly listed on Google Places) will appear near the top of the list. Companies have little control over this, and thus can't really move their ranking up or down.
Search Engine Land explains that relevancy may be hard to manipulate as well, since your primary keywords are littered all over your site. You won't get hits for keywords you're not attempting to rank highly for.
However, the last factor - prominence - is worth delving into further.
The news source asks, "if two businesses were to have essentially identical relevancy and distance factors, what sorts of things would Google algorithmically assess to determine which one should be listed first?"
Well, based off its PageRank algorithm, one would assume that links - i.e. the number of popular sites that link directly back to your page - and citations (the number of times your address or phone number is mentioned across the web) would be dominant factors, and they are.
But how about social factors, such as Facebook shares, Likes or Places metrics? The media outlet explains that the social network's recent purchase of foursquare check-in service competitor Gowalla indicated its commitment to geolocation, and that maybe stats such as the number of mentions, or the amount of people who checked into a location using Facebook Places could boost that store's local search rank.
The same goes for foursquare, which offers information about the total number of people who have checked in at a location as well as the number of check-ins associated with it. These could both be used as indications of popularity similar to links and citations.
Google, which recently updated its own check-in service, Latitude, with a points system and leaderboard, is clearly following the foursquare model. This proves that Google may begin to weigh check-ins more heavily in the future as well.