A $29 iced-tea maker helped win James Merrill 11 new customers.

Mr. Merrill, president of Nutritional Herbs, a company that distributes Sunrider Whole Food Concentrates, held a drawing to give away the appliance at a Baltimore herb festival last May.

In the process, he added 76 names to his mailing list by asking people to write down their names and addresses for the drawing. That list has yielded seven new clients who are buying products Mr. Merrill sells. Four others have become Sunrider distributors.

"It worked out pretty nicely," said Mr. Merrill, who operates Nutritional Herbs from his Columbia home.

As Mr. Merrill's example shows, you can market your company without shelling out $60 million annually like American Express does to advertise its green card.

By using a little creativity and a lot of elbow grease, the small business can find inexpensive ways to attract customers, said Susan Saylor, president of Multi-Media Marketing Inc., a Frederick-based company that advises small businesses on how market themselves.

Giving away freebies like Mr. Merrill's iced-tea maker is often an effective method of getting a potential client's attention at a trade show or other gathering, Ms. Saylor said.

An incentive is "sometimes a conversation starter, a way of approaching the customer in a softer way," she said. "It can lead the conversation to your product or to the service that you're displaying or trying to sell."

Offering free samples of your product or giving free demonstrations of your services can also be effective marketing tools.

Two months ago, Paragon Computer Services Inc., an Ellicott City company that provides computer consulting services to small- and medium-sized businesses, held a free seminar in which it demonstrated PC-based accounting software and networking.

To attract people to the seminar, the company mailed invitations to 900 area businesses and followed that blitz with telemarketing. Eighteen people representing 11 companies attended the seminar, which was co-sponsored by International Business Machines Corp., a partner with Paragon.

So far, Paragon has received about 20 "good leads" and one new client for its effort, which cost $925, said M. Jennifer Church, a principal with the firm who is in charge of business development. Church said many of the leads are companies that didn't attend the seminar but expressed an interest in other types of computer consulting services during her telephone conversations with them.

"If someone wasn't interested in the accounting services, I'd ask them if there was anything else I could help them with," she said. "And if they sort of hemmed and hawed, I'd jump right in there and tell them what we could offer them."

Other methods of marketing on a tight budget include:

* Network. Talking to people at commerce mixers, trade shows and professional meetings is a tried-and-true way to get the word out about your product or service, Ms. Saylor said. Usually, you'll pay a couple of hundred dollars a year for membership in a professional organization. Admission to each event is usually between $10 and $20.

When attending such events, be sure you're well equipped with business cards, brochures and fliers, as well as a memorized 30-second "commercial" about your company.

Make relationship-building your goal during the event rather than speaking to every single person in the room, Ms. Saylor said. "You want to focus on quality contacts, not quantity," she said.

After the event, follow up on leads with a letter or postcard.

Also, don't forget to ask your friends and family if they know anyone who can use your services. Often, your closest contacts will yield many leads.

* Promote yourself in print. Getting the name of your company in a newspaper or magazine is an excellent way of obtaining name recognition.

Apart from advertising, one way to do this is to send out press releases about goings-on in your company to newspapers and other publications. If published, these mentions can give a boost to your business.

To make up a press list, look through local publications and write down the names of editors concerned with your business. If the editor's name isn't listed, call the publication and ask for it.

Almost any activity in your firm can be fodder for a press release: office expansions or relocations, new bids or awards, or new services being provided to clients, Ms. Saylor said.

Write the release in a concise, factual style, with the most important information at the top. The editor should be able to cut it at any point without losing the gist of the story.

"You don't want to make the editor work," said Ms. Saylor, who recommended setting aside a day every month to send out press releases.

Publishing your own article in a trade or professional magazine is another reliable method of gaining name recognition. "Trade press editors are looking for solutions to problems," she said. "If you send them an article about a creative solution to a problem [in your industry], chances are they'll use it."

For a list of publications in your industry, consult the Standard Periodical Directory, a directory of about 86,000 trade periodicals. Be sure to submit articles to one editor at a time, and to obtain permission from a client before using him or her as an example in the article.

If you're not confident in your ability to write an article, find someone who is: a staff member, a free-lance writer, or a friend or family member, Ms. Saylor suggested.

Once the article has been published, send copies to your clients and potential clients.

"It's reassuring to your client to see your name among the experts," Ms. Saylor said. "It gives you much more credibility than you'd have otherwise."

* Speak publicly. Being a guest speaker at a professional or civic meeting, or on a radio or television talk show can accomplish the same goal as publishing an article in a trade magazine: It puts your name, and your company's name, in the public eye, and it provides assurance of your expertise to potential customers.

Send a letter describing yourself and what you'd like to discuss to the organization. (Usually, your library will be able to provide you with the name of a contact person and an address.) Follow up with a phone call.

As far as television and radio are concerned, Ms. Saylor recommended studying various program guides and picking out those shows that have a connection with your industry. Contact the producer, program director, or host with your ideas and background.

* Market by phone and by mail. Although they can be costlier than the above methods, telemarketing and direct mailings are popular ways of attracting clients. Used together, they can be especially effective, Ms. Saylor said.

You can rent mailing lists from a mail house (found in the Business Yellow Pages under Advertising-Direct Mail), list broker trade magazine. The lists usually cost between $40 and $70 per 1,000 names. If you want to follow up a direct-mail campaign with telemarketing, many mail houses or list brokers will permit you to obtain, for a smaller charge, the same list with phone numbers.

Many business owners find it more economical to hire someone to telemarket, rather than doing it themselves. Hourly wages usually range between $5 and $8. You may also want to consider giving a performance bonus for every appointment the telemarketer obtains.

* Be deliberate. No matter what type of marketing program you pursue, be organized about it. Decide how much you want to spend per year on marketing and what methods you want to use. Track the effectiveness of your efforts by asking every new customer where he or she heard about your business. Drop those methods that don't win new clients.

"The biggest problem is that most businesses go out there and market by the seat of their pants," Ms. Saylor observed, "and then they end up spending a lot of money and not getting a lot of results."

FAX TIPS

Susan Saylor of Multi-Media Marketing Inc. offers the following suggestions for marketing your business on a tight budget:

* Give away free samples of your product, free demonstrations, or just plain freebies. Everyone loves to get something for nothing, and by drawing attention to your business, you're likely to persuade some people to become customers.

* Network. Attend commerce mixers, trade shows and professional meetings to get the word out about your business.

* Promote yourself in print. Send in news releases to local publications, or write an article about a topic of interest in your industry.

* Become a guest speaker at a professional or civic meeting, or on a radio or television show.

* Market by phone and by mail. Be deliberate and organized about your efforts.