I'd like for, in this matter particularly, more realistic approaches. So, better economics = better equipment, but your troops do not level up, they are just rich soft peasants/soldiers wanna be. The more wars your faction fights the more veterans it produces, and those should be high level troops. That would make for great gaming imho. Imagine that you join, let's say, the "Varangians", and so it happens that in your current play they were at war like crazy, so you get incredibly strong units, but, the fief you were given is poor as it can get due to being raided multiple times, now you have Rus-like ninjas under-equipped! A guy dressed like an militia peasant managing to wreak havok due to his "war experience".
On another scenario you are a "Swadian", but your troops only feast butter due to Harlaus, so you invest like crazy into economics, and become a fantastic medieval Trump-eske lord, now your peasants wear shiny armor! But you go on to face those warmongering "varangians", your army gets wrecked due to lack of experience.
I know it's a stretch, and I know it won't happen, but then again one can always imagine stuff, am I right!?