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What do YOU do when local keyword research says zero?

Greetings from inside the SEOigloo!
Here is a challenge we’ve run into enough times over the years to make it seem worth a blog post to me. I would really appreciate hearing from all readers on this subject.
What do you do when you’re building a website or doing SEO for a local business and your keyword research shows zero searches for what the service does or sells?
For example, supposing you have a client who sells sewing machines in Houston, Texas. While, obviously, you can find generic searches for sewing machines, brands of sewing machines, etc., keyword research indicates that 0 searches like this are taking place locally. If keyword tools like WordTracker, Google Daily Estimates, etc show you that 0 people are searching for things like ‘sewing machine houston texas’, what are you to make of that?
You know your client sells their machines. You know they experience enough sales to stay in business in their community. Are you to believe that no one is using the Internet to look for what they’ve got? It would almost make you feel that having a website will be pointless, though this can’t be true.
In some cases, using a tool like SEOdigger (thanks, Dave!) can be useful in looking at your client’s competitors to see what they are ranking well for and that can at least help you brainstorm which phrases might be valuable, but what if the client has no local competitors, or the competitors’ sites are are completely unoptimized and therefore not ranking well for anything?
You just keep coming back to zero.
This is a dilemma we struggle with and, in such cases, it’s been our custom to optimize for whatever we discover to be popular broad searches (sewing machines) plus the location, but at the end of doing this, it feels like you’ve not developed a very strong strategy. It’s like you’ve said to yourself, “well, I’ll do this just in case anyone ever searches for a sewing machine in Houston.”
There’s got to be a better way to go about this, but I’ll be darned if I can think of what it is when no amount of deep digging is bringing you any data.
Have you faced this with projects? What do you do?