Here’s the thing about characters: as soon as you name one, this is a cue for readers this character needs to stick in their minds. It’s subconscious, I think. The name is a label. When encountering new people in our lives, the first thing we usually tell them is our name and they, if polite, return the favour.
For this reason, are stories out there that have all those ‘random guard #1-#142’ in them. The writer didn’t think such minor characters needed names because they serve as a living backdrop. This is similar to movies: you need actors to portray important characters, but you don’t need to pay for talent to portray ‘Screaming citizen #654’. That’s what extras are for.
I’ve decided to name only the important characters. But what to do with all those in-between characters that are important for individual scenes but not the story itself? So I’ve reached an agreement with myself: the key characters get a last name while the minor characters only the first one. We’ll see if it makes sense.
As a side note, I’ve heard once that it’s wise to use different initials for important characters. This is done so the reader doesn’t mix them up. I don’t necessarily do that but I definitely use names that sound different from one another. All the same, I don’t think a name can do what good characterization can do instead. The name is a label. If you build a character well, your readers won’t have a problem remembering who is marked with that name. For instance, I have no problem remembering names in A Song of Ice and Fire even though there are tons of them while I can’t say the same for Lord of the Rings (sorry, Tolkien fans, nothing personal). Lord of the Rings characters are simply too simplistic for me to be remember them, especially when you consider that most characters have 5 names or so. That’s equal to slapping a reader in the head, daring them to drop your book.