Abstract: This article discusses the impacts of customer relationship types, i.e., trust relationship and encounter relationship, on the customers'loss perception, emotion and compensation expectation in the cases of service failure in catering industry, adopting the method of scenario simulation experiment. The findings show that good customer relationship can alleviate customers'perceived loss (including material losses and psychological damage), negative mood and spiritual compensation expectation caused by service failure to a certain extent, though has no impacts on material compensation expectation and compensation services provided by the company. Those research results can be taken as a theoretical guide for service companies to formulate a service compensation strategy.