Creating Memorable Characters

Character is the backbone of any work of narrative, more important than plot, more important than message; without believable characters with whom an audience can sympathize, no story will be as effective as it might. "Who is the story about?" is always a more important question than "What happens in the story?" If we care about people, we'll listen to tales in which seemingly nothing happens, just as you and your friends and family might trade accounts of your days over dinner. Here are some things to remember about creating the people who will populate your stories.
Characters need a past history.
Called "backstory" in dramatic writing, this history tells us a great deal about who a character is and where he or she has come from. Think about yourself and the many ways in which your life experience has shaped you and you'll recognize the importance of creating a backstory for your characters. Although it may take additional effort--and you may, especially in a novel, still be finding out things about your characters as you write--knowing your characters well before you begin can help dictate some of their responses and help you tell your story.
Did a character have a former girlfriend who loved the song "Copacabana"? Was the character abused as a child by a family member? Did the character drop out of school at age seventeen to go to Hollywood, only to return home defeated and desolate? Any of these factors can make a character come alive in your mind, whether the reader ever knows about them or not. In fact, it's best if you don't tell them everything; remember Hemingway's iceberg principle: You only see one tenth of an iceberg, but it's the hidden nine tenths that holds it up.
Writers use many different techniques to make characters seem real.
When you read a story like Flannery O'Connor's "A Good Man Is Hard to Find" or Tim O'Brien's "The Things They Carried," note how many different ways these talented writers reveal information about their characters. Some basic ways: character names; setting; characters' likes, dislikes, personal preferences; thoughts and actions; dialogue; interaction with other characters; things said about the character. There are other techniques, but you can see how these may have an effect on how well-depicted your character seems to the reader. Here's how it might work: Imagine a disabled Gulf War veteran named Bo who drinks Old Milwaukie, lives in a green clapboard house that lists slightly to starboard, drives a Dodge Dart, and daily tells the mailman--as he sits on his porch plotting to bomb the U.S. Capitol so that he can get his revenge on the government--to "Get out my yard, flunky." The more different methods of character depiction you can work in, the more vivid your character will be.
Characters should be three-dimensional to be believable.
Rarely in life is anyone all one thing--all good, all bad, completely cerebral, completely ruled by her passions. Since few people are completely one-sided, it helps the plausibility of your characters if they seem human as well. Your hero should have human flaws; they will make him both more sympathetic and give him obstacles to overcome. Your villain, likewise, should have a few points of sympathy as well. The greatest villains--John Milton's Satan, Thomas Harris' Hannibal Lecter, Bram Stoker's Dracula--are all articulate and cultured creatures.
Remember also Walt Whitman's "Do I contradict myself?/Very well then, I contradict myself." A man who hates everything and everyone might have a family of birds living in his oak tree that he cherishes. An atheist might be fiercely moral. A person afraid of heights might be driven to rock-climbing. A Vegan Buddhist might smoke Marlboros.
Contemporary literature is fill of examples. In Kazuo Ishiguro's The Remains of the Day, the butler Stevens, a man seemingly closed off to emotion, reveals himself as a man deeply affected by love and loss. Thomas Keneally's Oskar Schindler is a mercenary failed Catholic who risks his life and spends his fortune to preserve the lives of his Jewish workers. Almost all interesting characters you discover will have contradictory impulses at war within them. Although your characters typically will act in well-established ways, be open to the possibility of inconsistency in them. Human beings encompass great contradictions; it is what makes them interesting, and it is what makes them human.
Characters need to want something, and they must be given the opportunity to make a choice.
To create a useful conflict in a story, your characters have to have a deep-seated want or need that the story is about--either the gaining of that need or the frustration of it, possibly forever. In some sense, that need must drive the character and define the character. It can be many things: revenge, love, the need for acceptance, the desire to get the girl, the desire to get into a drive-in movie without paying; the character may not even know what he wants. But you must know. You character has to want something or the story will not work.
Likewise you have to treat your characters with enough compassion to recognize that they must be given a choice. I hate the deterministic fiction of Naturalists like Emile Zola and Theodore Dreiser because I don't feel their characters are really given choices; Fate paints them into a corner and they are stuck there. Characters should always be given a choice of paths, of actions, of decisions, even if they choose the wrong one or choose not to make a choice. This is much more satisfying than the feeling that Fate/God/the Author has decreed that this story can only end in one way and so every other avenue must be blocked.