Word of mouth is the best tool Kelly Larson knows to bring people into her ice cream shops. "If you are in the mood for ice cream and somebody says to go to Sweet Tempations, that's powerful," says Larson, president of the four-store Grand Haven, Mich., company. To help build word of mouth, Larson e-mails customers about store events, networks with corporate gift prospects at local meetings and recruits local schools and churches to her cause. "It's the most powerful way to get new customers," she says.

Creating positive word of mouth for a local business starts with maintaining quality. "If you get them into the store and you're junk, they're never going to come back," Larson notes. Local businesses are disappointed with advertising in conventional broadcast media and publications. Trina Sheridan, president of Chicago cooking school and kitchenware retailer The Wooden Spoon, spent $5,000 to advertise in a coupon book that generated just two customers. "Advertising is so hard to see a return on," she says.

Yellow Pages advertising can be different because consumers use the directories, whether online or offline, specifically to find local providers, says Holly Berkley, president of Vantage Internet Services in La Mesa, California, and author of Marketing in the New Media (Self-Counsel Press, 2007). Be sure to include your website URL in Yellow Pages ads in print and online, says Berkley. This way customer and prospects will then be able to find you on the Internet whether they're thumbing through the Yellow Pages or using search engines.

Networking lets you personally represent your business to prospects. Larson found an unexpected market for corporate gift baskets at Chamber of Commerce mixers and Rotary International meetings. She passes out business cards and wears a shirt bearing the Sweet Temptations logo. "It's just keeping our name in front of people," she says.

To supercharge your networking, try handing out gift certificates, suggests Bob Negen, a Grand Haven trainer and co-author of Marketing Your Retail Store in the Internet Age (Wiley, 2006). "Make it a small enough denomination that you're not giving the store away, but big enough that it gives somebody incentive to come in and see you," he says.

Similarly, don't just contribute to local causes. Set up an explicit incentive for charities and other non-profit organizations to refer business to you. For example, contribute a percentage of sales on a designated night each month to a local school. "Create ways so that if they send you more customers, you send them more money," Negen says.

Being online lets some businesses tap global markets, but local firms need websites and e-mail marketing too, Negen says. They just do it differently. Rather than emphasizing shopping carts and online ordering, local companies' websites need directions and maps to stores, testimonials from locals, and references to local resources and events. "Make sure you are spreading the word to your local customers," he says.

Make sure your company shows up when people use search engines to find local providers, Berkley says. Place your complete address including ZIP code on every page of your site. Make sure the address is in text, not embedded in an image, so search engines can find it. Many search engines analyze searchers' Internet addresses to find out where they are, and then rank local providers higher, Berkley says.

If you use pay-per-click advertising, specify that your ad will only appear on local rankings. That produces fewer wasted click-throughs and better prospects, Berkley says. "People who are searching local markets are much closer to the buying process than people who are just searching more generally," she adds.

Marketing with a weblog is probably a waste of time unless you have something truly meaningful to say--and the time to say it. "There is already too much information out there," observes Berkley. But e-mail marketing can be well worth it. "E-mail marketing is more effective than anything else in terms of bang for the buck," says Larson, who e-mails news of special promotions and store events. "Any time I have a reason to communicate with customers, that gives me an easy way to do it," she says.

Use your website to capture e-mail addresses from visitors by offering a free electronic newsletter or discount coupon, Negen suggests. Berkley recommends closing the loop by directing people to your website with a link to a coupon or other attraction in the signature block at the bottom of all your outgoing email messages. Larson advises you looking at anything that will generate more positive buzz. "Keep trying new things," she says, "and keep changing it up."

Mark Henricks is a freelance writer based in Austin, Texas.