Google webmaster tools allows you to set a specific geographic target.
This way you can target users in a specific country.
If you’re a local business and only source your customers/clients from one country, this will help you.
Once you’ve setup Google webmaster tools, go to configuration > settings to select your target country.
Select the country you want to target from the drop down and check the box to target users in that country.
Basically what Google are saying is if your domain isn’t country specific like .us, .uk or .au and you only want traffic from a specific country, you should configure these settings.
So if your domain is .com, .net or .org and you only want traffic from one country, configure these settings to notify Google.
If you have setup Google places, Google will already know that your business is in one specific location.
According to Google, over 95% of consumers use Google to search for local businesses online.
Microformat Local Search SEO
You can also install a plugin or add the code manually to your contact page which adds your local business details in hcard & vcard microformat.
Bing Webmaster Tools
You might also want to setup the same targeting using Bing Webmaster Tools as well.