Using dialogue in your novel is, of course, an essential element to enable the reader to get a much better understanding of your character's personality. However, one of the things I have learned since studying the craft of writing, is that overusing dialogue can have the opposite effect. As a writer, you need to balance the use of dialogue, action and narrative as much as possible to engage the reader emotionally. The one way to ensure this is to have at least two characters together in a scene to blend the three elements together. So, is there any time you should focus on dialogue alone? If you need the reader to understand a particular personality trait or a vital piece of information, then you do not want your scene crowded with action or narrative. In the same way, when a friend is telling you a very interesting story in a crowded noisy area, you cannot concentrate completely. You need your reader to be completely involved and not distracted by anything else. 

Here are some great examples of novelists that create memorable dialogue. 

Crime novelist Elmore Leonard writes dialogue that is witty and catchy and many of his novels have been made into some of the most dialogue filled screenplays in recent times such as Jackie Brown and Get Shorty. 

Novelist and playwright, Sinclair Lewis creates a dialogue that is almost poetic. This is evident the most in his novel Mean Street. 

Last but certainly not least is John Steinbeck. His dialogue, in particular in Of Mice and Men, is so colourful the characters come alive and almost jump out of the page. You really get an insight into the inner workings of their minds.  

The use of dialogue allows the reader to understand the character, in as much as they will reveal a lot about themselves by the pronunciation of words and construction of sentences. If you want to create conflict between two characters that is fast paced, then you may consider using just dialogue for a section of the scene. Dialogue is also a great tool for covering a backstory; this is prevalent a lot in crime novels where the victim needs to relay a lot of information quickly to the investigator. If you can replace dialogue with a simple look or gesture, then do so. In other words, if you can 'show' and not 'tell' the reader, your novel will be far more engaging and less condescending.  

Although there are no rules set in stone regarding the use of dialogue, action and narrative it is useful to have some guidelines. Here are a few questions I ask myself to decide when to use dialogue and when to write an action scene.  

Use dialogue if the pace of the story is slowing down. 

Do you have too many scenes of just dialogue running consecutively? Then split the scenes up using a mixture of narrative and action.  

Are your characters providing too much information about themselves as they talk to each other? Are your characters confiding in one another details that they should really only be reflecting on to themselves? If so, replace some of the dialogue with narrative.  

Do you want to make your characters more empathetic to your reader? Then use a mixture of narrative and dialogue.  

Whether you are using dialogue, narrative or action, the key element is that your story is evenly paced and moves the storyline forward by revealing the motives of your characters.