They can be incredibly effective and in some instances a necessity. The problem with them is the number of potential issues that can see them quickly change intent from high quality, helpful pages to keyword-stuffed trash.
There are three major issues we come across here on a semi-regular basis and they come down to communication, though none of them are easy to resolve:
**"Our service is the same everywhere" **- Every now and then we get a client who insists that their product or service is exactly the same everywhere, even when we know for a fact that it isn't. This makes it incredibly hard to build effective local pages because all we can do is offer info on the generic differences of their vertical rather than the unique characteristics of this particular business.
"All the top ranking competitors are using the keyword constantly in their content; the fact that you haven't leads me to believe you don't know what you're doing" - We take the educational approach right from our original proposal all the way through but sometimes, there is a not-so-silent business partner or the owner's family member who "knows SEO" and claims that our lack of spam means we're a waste of money after a few weeks of a campaign. Fun!
**"We need a landing page for every combination of location and service" **4 services across 10 locations? We need 40 landing pages!!! Obviously, this is always an absolute "no".
Irritating as these things really are, the solution is always the same. Run through the project plan again, educate them on why we're going down this route, provide some external sources like Miriam's great post and encourage questioning. The vast majority of the time this gets everyone back on the same team and a productive, well-optimised site. Every now and then it means we simply don't work for that client anymore if they continue to insist on spam.
Miriam's guide on this echoes our internal thoughts and process almost exactly and the key message is to never create local landing pages if they have no business existing in the first place. A question we so often ask here: if Google didn't exist, would you still perform that task?