:yeahthat: to Doug's comments, and to the suggestion of reading "The Savvy Flight Instructor." I read that book several years ago when I first became a CFI and the knowledge is gold. A few weeks ago I bought the book just to keep as a reference around the office and encourage other instructors at my school to read it in their spare time.
Another idea you might try is to teach a free ground school class. I've done those before with great success. Although I received pay for teaching the class, we used it as a promotional tool for the school, so talk to the owner of your school to see if he could pay you something and take it out of the advertising budget...and if there is no advertising budget, that's another rant of mine for another time
Advertise the class as free if they buy their own materials and promote it as a good way to learn about flying if they're unsure about flight training. Don't stress out about trying to cram every detail about flying in to their heads (as in, don't try to prep them for the written exam like a lot of ground schools), just teach them as much as you comfortably can and make it fun and interesting. Show pictures, tell stories, use video clips, use PowerPoint, etc. Try to convey what it's like to be a pilot, not a student.
Not only will it get them excited about flying, but it builds a rapport with them so that when they do start flying, they'll want you to be their instructor.
The last class I taught like that I had 7 students and three of them became full time students of mine, with another one signing up to fly with a different instructor at my school. So 4 out of 7 is a pretty decent recruiting tool!