If it were my game to design I'd completely rework the guild/faction system in the following manner
1) Increase the number of factions (examples below)- Political & Religious factions suitable to the setting (like Morrowind's Great Houses)
- Merchants and / or Bankers guild
- Bandits and Highwaymen
- Craftsman's Guild
- Pauper's Guild (aka The Order of the Hobo)
- Witch Covens
- Imperial Civil Service
2) Add a reputation mechanic in place of "rank"- All factions will have a reputation meter. While you can "join" and gain "rank" in some factions, others won't be "joinable"... you'll just be able to gain reputation with them.
3) Make reputation gain slow moving- So that (4) makes more sense.
4) Add semi-random repeatable quests (in addition to normal quest content)- Repeatable content gives you something objective based to do when other quest lines are completed.
- Example 1: Mercantile Guild needs to transport some goods to another city. Meet the caravan outside city walls and escort them to location XYZ. Random bandit encounters along the way leveled according to value of the caravan. Alternatively, you can raid the caravan on behalf of the Bandits faction
- Example 2: The Mages Guild (or whatever it is now) is always in need of alchemical ingredients. You can keep doing fetch quests to gain reputation with the occasional superior potion as reward.
- Example 3: The Fighters Guild (or equivalent) has been contracted to escort a wealthy merchant to ___. Complete the escort for increased reputation with Fighter's Guild AND Mercantile Guild.
- Example 4: (anolog to 3) Fighter's Guild has been contracted to shake down a wealthy merchant for some gambling debts. Get the money for an increase in reputation with Fighters Guild AND Theives Guild (or whoever controls gambling) but decrease with the Mercantile Guild.
5) Create a matrix of guild relationships whereby progression in one creates anti-reputation in another- Some guilds would be polar opposites (Mercantile vs Bandits)
- Some guilds would be naturally suspicious (Fighters vs. Mages)
- Some guilds would have no relationship linkage (Fighters & Imperial Civil Service)
- Advancing in a guild would increase "anti-reputation" in polar opposite guilds, and also suspicious guilds (but to a lesser extent).
- Gaining too much anti-reputation may get you thrown out of a guild.
6) Build quests to reduce anti-reputation- In cases of guilds that are not polar opposites, build quests into the game that give lore satisfying reasons why you advance in both
- Example: Mercantile and Thieves guilds are naturally suspicious. If you advance far enough in each you open up quests to broker an agreement between the two. Perhaps bribing local nobility to legalize gambling and bring it out of the underground. Thieves and Merchant guilds would corner the market on the gambling and run it as a joint venture.
7) Add unique rewards / perks to the progression- Not just material rewards, but perks such as vendor discounts, body guard companions, permanent / semi-permanent buffs, etc.
- Example: Enough reputation with Imperial Civil Service grants you access to a mount that runs X% faster.