1) Produce good music on the regular
2) Good to nights where you sort of music is played. Take with you;
- 20 x mix CDs containing at least some of your songs
- 5 x production showcase CDs containing 3-5 of your tunes (unmixed)
3) Give the mix CDs to the party people, give the production showcase CDs to the DJs. Make sure both CDs are clearly labelled with contact info/name/SC link etc.
4) Do this at least once a month for a big party, and at least once a fortnight for smaller local nights.
5) Repeat the cycle every month, each time taking with you different CDs
6) This means you should be producing on average at least one decent listenable track per week and a DJ mix at least once a month
7) If you're not at that stage, work on your productions until you are are then see step 1). Repeat
The giving out physical copies thing is important IMO, particularly if you want to build a local following. CDs get played, in cars, at house parties, when folk are chilling, whatever. If you're not comfortable giving out stuff on CDs, you need to ask yourself why you think it's good enough to offer for free download in the first place.
The whole process is reciprocal - that is to say, whilst you're doing this you'll be having interactions with people, other producers, DJs, promoters, party people...all of whom have something to bring to the table. I recommend getting a copy of this book;
It should be under $20/$12 wherever you are, probably cheap off eBay, and read it. It's about how to build lasting purposeful relationships with people whom you are networking with.
So for example, if whilst you're giving out CDs someone does likewise to you, give the CD a listen. If they email you/FB you a SC link, listen to it. Properly listen to it, don't just hear. Give the person a shoutback via whatever medium giving constructive feedback on their music, ask them about certain things, say what it reminded you of, and finally ask that they keep you posted whenever they release new stuff.
If it's a flyer for a new party, or a blog post being launched, take the time to check it out. Make a note of who/what is being mentioned. Are there other DJs/producers on the flyer you've not heard of? If so, check them out and see what they're about. Does the blog post mention something relevant that you like, or is simply a good read? If so, maybe make a FB post about it/Tweet about it, then send the author a message letting them know you're spreading the word.
NB: Only do this for stuff you actually like, I'm not suggesting you start fawning over some genre/sound that you're not into just to get ahead.
Build relationships, expand the network...once you've got the number of contacts etc to a decent stage, think about transferring it to some sort of database style setup, where you have people categorised by promoter/DJ/producer/party goer etc. Then you can do targetted mailshots of your stuff. For example, I probably wouldn't send a production showcase to party goers, but other DJs might be interested. Similarly, other DJs might not necessarily want a mix CD, but the party goers and promoters might.
i've got a shit ton more to add on this, but I'll update this list as the days goes on.