Andy, in the comments on Factions, wrote:
First thing that comes to mind is bonuses and penalties to diplomacy type rolls and selling/buying prices. One simple chart should do the trick I think. Maybe if you get a high enough score with one faction you get the opportunity to buy some of their “special, unlisted” items. Or maybe you get a house in that city or an awesome item if your score is maxed out. Marriage proposals, orgies at the local brothel, etc. Just some ideas.