When you assign a photo to one of your iPhone contacts, you'll see the picture every time that person calls you. With this small convenience, you can mentally register who is calling quicker than you might by reading a name or number. A photo is also convenient when you have multiple contacts who have the same first or last name, making it easier to tell them apart.
Press the "Contacts" icon to open your contacts. Find and select the person to whom you want to assign a caller ID photo.
Select "Edit" and choose the "Add Photo" circle. Select "Choose Photo" and select the album that contains the individual's picture.
Tap the picture you want to use and then use your finger to move the picture within the cropping circle. Use a pinching motion to change the size of the photo within the circle. Tap "Choose" when you're satisfied. Tap "Done" to finish editing the contact.