The vast majority of folk songs tell stories, so IMO the first thing to do has to be to tell the story. Vocal range/power/dynamics, if you've got it, are a plus, but generally the first thing that I listen to is the lyrics. If you can involve the audience and make them take an interest in the story that you're relating to them, then you'll be doing pretty well. The best guy I can think of in this vein is Vin Garbut, who'll tell you the story of the song that he's singing and have you in stitches - then sing the song and have you in tears.