I watched Hercules the other day and that moment was when Hades walked into the party and delivered some shady opening lines. Good stories aren't always obvious at first, but the moment is sure to come when you tuck in your elbows, squirm a little deeper into your arm chair, and think, “Yisss, this is going to be good.”
This point is the hook. It's what grabs your readers and gives them a good reason to keep reading your book, even if you get a little carried away with a boring description or decide to kill off everyone's favourite character. The most important thing you can do for your story is to give it a good hook.
Often it's when an amazing character appears (like Hades). Time to introduce your favourite character? Make sure he has a striking entrance and utters some memorable opening lines. It doesn't have to be the hero or even the villain, but it should be an important character—one that your readers will hopefully end up liking as much as you do.
Another hook is to reveal an interesting plot point or idea in your story. A short story I read recently started off with a boy getting ready for his first day at a new school. Nothing new or particularly interesting there. However, on his way to school he meets a man who sells him a mask—one that reveals instead of conceals. That was an interesting idea—one that I hadn't run into before—and I wanted to read on and find out how this mask was going to be used.
Since the hook is such an important part in making people read your story, make sure you put it in your story as early as possible. You might want to make it the opening event and use back flash to fill in important information if you need to.
But whatever you make your hook, be sure that it's actually an important part of the story, otherwise your readers will feel cheated—they read this story for something they didn't get. Don't create a great character and never make him show up again, or make the magical mask irrelevant after the first chapter.
The hook is so important that it should be a part of your story's synopsis as well, whether it's part of the plot or a character. "A boy discovers a bottomless well that whispers..." (plot); "A deranged traffic light with a grudge against humanity..." (character).
See what I mean? Hook 'em.