NPCs are characters the player can interact with outside of the guild. They have at least one (usually more!) services they are capable of providing:
Visual novel style cutscenes. Used for introductions, story advancement, or to advance their personal questline. These should be replayable somewhere.
Dialog trees. Used to flesh out the world and NPCs further with optional lore dumps and backstories. More dialog can be unlocked through reputation.
New quest categories. Introducing yourself to an NPC can unlock a new quest category that they're "in charge" of. Should have some kind of appropriate theme, whether it's the flavor of quests are being taken, what rewards are given, etc.
Progression. Doing quests for the NPCs can increase the player's reputation with them. This can unlock more quests, items for gifts, items in the shop, new cutscenes, and occasional other rewards. This should not be an MMO hell grind.
NPCs can sell the player items and guild upgrades for various currencies. Guild upgrades are one-of, but items can be bought over and over.
Some NPCs may provide other shop-like services. They may use a different interface, but as far as the player is concerned they're just funny shops. This can include buying and selling size directly, trading currencies, buying reputation, etc.