While good customer service typically involves saying ‘yes’ as often as you can, there will invariably be times when a ‘no’ is the only appropriate response. How you say it makes all the difference.

“No.”
While admirable from a clarity standpoint, a stand-alone no conveys cold indifference (not the warm engagement of good customer service). At the very least, try to soften the blow with an explanation.

“No, sorry.”
It’s a little better than the above reply, but the effectiveness of this one depends on both your sincerity and the context. If the client feels that the ‘no’ came a little too quickly, as if by reflex, he or she will probably question the sincerity of the attending ‘sorry.’

“No, not yet.”
While it may fall short of an immediate remedy, this response at least conveys to the prospect that his or her concern/question/request is valid.

“No, but …

I’ll make an exception.” [actually a yes]
I’ll recommend a change in policy.”
Here’s a better way.”