Most service units focus on creating guardrails and consistency. This can create a lose-lose-lose for the customer, the employee, and the company via dissatisfaction, frustration, lost revenue, and negative word of mouth. You should encourage your staff and supervisors to intelligently go beyond the norm. They need to be trained that it is ok to say “no” and how to do it effectively — and they need to be trained and empowered to be creative, understanding that it will not always be successful and may take a bit of extra time.
I recently was sitting in an outpatient medical facility of a major hospital where an elderly patient who was sight- and hearing-impaired called out for a nurse multiple times. The intake nurse, buried in her paperwork, passively called out, “I’ll be with you in a second.” Four times over ten minutes. Ultimately, I and another patient intervened and asked the desk person to talk substantively with the patient. While she did, her explanation as to why she had not engaged was surprising – I don’t know how much longer it will be so I really have nothing to tell him.
I’ve had counter clerks at a leading convenience store chain as well as senior pilots at a major airline essentially say the same thing – “I cannot satisfy you, so I’d rather not say anything”. When the counter clerk saw the guy in line grumbling about his sandwich, the clerk made change for the customer with eyes down – later telling me, “If I don’t make eye contact, they usually don’t complain.” The senior pilot said, “why get on the PA system if I don’t have anything new to tell you?”
All these staff were so uncomfortable creating dissatisfaction that they chose not to communicate at all, which is worse! In a contact center, the equivalent of not communicating is to invoke stock language that is, on its face, not responsive – and which pours gasoline on the customer’s fire. These front-line people are uncomfortable with communicating because they fear negative blowback. With the proper tools, they can defuse the blowback and leave the customer mollified rather than dissatisfied, which, as seen below, has a major impact on revenue and word of mouth (WOM).
Why Bother? – The Payoff of Explicitly and Competently Saying “No”
Counterintuitively, saying “no” effectively has large benefits. A convincing “no” that leaves the customer feeling treated fairly moves them from dissatisfied, where loyalty is less than 10%, to mollified, where loyalty is often 50%. This means an effective “no” to three customers generates as much revenue as winning one new customer. Also, a Japanese auto manufacturer found that where “no” was effectively explained, goodwill expenses to prevent escalation to regulators was cut in half.
At the other end of the scale, moving customers from satisfied to delighted increased loyalty by 8-10% as well as making them 30% more willing to be cross-sold, much less price sensitive, and fostered word of mouth that was twice as compelling in winning new customers as WOM from satisfied customers. 
Effective Techniques For Saying “No”
Saying “no” effectively requires six actions; calming the customer, timely response, empathy, an apology, an action to mitigate the hurt, and an explanation of why the action is fair.
The first step is to calm the customer down. If the customer is angry or upset, physiologically, the blood has gone to their muscles from their brain and they are not thinking clearly. CCMC’s research shows key drivers of acceptance are feeling treated fairly, receiving an apology, and expression of empathy. You should agree with the customer that they deserve to be upset and allow them to vent without arguing. Further, thank the customer for their past business to show that they are valued. To attempt to fix the problem before fixing the customer is a doomed effort. The critical point for the front-line staff is that they should not take the yelling personally- the person is venting, not meaning to insult the CSR.
The response must be timely. This means that the first person the customer talks to should indicate that there may be a negative outcome if there are indications to that effect. If the company knows first, e.g., the pilot identifies a mechanical issue, the company should communicate as soon as you know there is a problem. Bad news does NOT get better with age and delay makes it look like you were hiding the problem. I’ve had airline executives state they did not want to upset people until the situation was fully diagnosed. It is better to acknowledge the issue and then say it was fixed than to not acknowledge it right away.
Show empathy – Empathy conveys you understand and ideally can identify with the customer’s pain and frustration. If you’ve been in a similar situation, you can convey it but make sure the focus stays on the customer’s issue, not yours. I recently was hosting a hybrid meeting in a building on a Sunday evening and we were not able to get the internet system to work, creating significant disruption to the meeting. When I complained to the head of building operations later in the week, he apologized and said, ” I know what you mean – we had serious signal problems all day Monday which disrupted a bunch of meetings.” Immediately, my anger dissipated, knowing there were a bunch of others who had similar if not worse problems. Misery loves company.
Apologize – this is separate from empathy. Even if you or the company did not cause the issue, you can say you’re sorry this happened to the customer. This is apologizing for the customer’s situation without accepting blame for causing it. If the company did drop the ball, it is ok to say so, the lawyerly approach of never admitting anything can be gasoline on the fire. At Nestle Purina, the front line is empowered to apologize for the problem even if not at fault. Further, in the action step below, they are authorized to pay for a significant vet bill even if not formally taking responsibility.
Take care to use simple person, unbureaucratic language. The worst word to use is to apologize for the customer’s inconvenience – in every instance the word has been used on me, the issue was not an inconvenience, it was a disaster causing significant disruption to my life. Eliminate this word from your dictionary.
Take action to address the problem which can range from fixing or mitigating it to at least reporting it to the company Continuous Improvement Process (CIP). The 2022 CCMC National Rage Study found that three key things customers wanted were an apology, an explanation of what happened and to know it was reported to management to reduce the probability of recurrence. While the front line should be empowered to solve the problem, like Nestle Purina paying for the vet bill, an airline can provide meals and CPG companies can replace the product. Where the damage cannot be reversed, assuring the customer that there is a formal, effective CIP can move them from dissatisfied to mollified, thereby raising the probability of repurchase. However, for CSRs to sound confident that the CIP will have an impact, the company must have an effective process and CSRs must be aware of some of the recent improvements that it has achieved. It is also acceptable to say, we’ll cover this loss this time but I’ve made a record you’ve been educated to we will not cover it next time – said nicely, of course.
Offering the customer options allows your action to be responsive to the customer and gives them the feeling of having some control over the situation. “I can refund your $20 now or give you a coupon good for $50 in the future, which would you like?” Likewise, telling customers a flight is canceled earlier actually gives them more certainty and a jump on starting to rebook the flight if the airline is not doing it for them.
For the top five difficult problems customers will encounter, the company management should provide the front line with guidance on the range of actions that are reasonable in various situations. We call these matrices, Flexible Solution Spaces. At a leading travel company, we developed five different solutions for a single travel problem based on who caused the problem (customer, company, or third-party) and the value of the customer (Platinum, Gold, or Green). This was presented as guidance that the front line could use or ignore if they felt strongly that another approach was appropriate. I and Ron Zemke, (the author of “Knock your Socks Off Service”), found that providing guidance on the five top problems was all that was needed – CSRs could extrapolate from those to any other situation and arrive at a good resolution. Further, Paul Zak found that staff given flexibility were much happier and were more easily retained. 
Leaving the customer treated fairly requires a clear believable explanation of why the negative response is reasonable. If the CSR is working from a flexible solution space where they have various options based on the circumstances, they sound more confident and can convey the logic. Part of the explanation can include facts such as while the customer is now out of warranty, they did receive fair value and performance while the product was in warranty.
Explain the rationale for the action requires going beyond stating that “this is our policy” to explaining the rationale for the policy. Management should provide at least a top-line explanation for each outcome and, where regulatory issues are involved, a more detailed explanation. Further, referencing where the customer was informed of the warranty details won’t make them happy but will often gain acceptance that they were told about them even if they did not read or remember them.
For advice from other experts on saying no, especially in technology product areas, see the Intercom and HubSpot blogs by Sharon Moorehouse and Swetha Amaresan respectively.
Measuring The Impact of Saying “No”
It is critical that you measure satisfaction and willingness to repurchase by type of issue contact. Only 20% of companies do this. If you don’t, you cannot tell which responses are working and which are not. Further, two other important metrics that are seldom used are asking the customer’s satisfaction with feeling treated fairly and the clarity of the explanation for the action taken. Those two metrics have a very high correlation with intention to repurchase and recommend.
Taking Action to Say “No” More Effectively
- Create a rough business case – estimate how many customers are leaving your service process dissatisfied. Be honest. Remember many customers cause their own problems by not following directions.
- Get the supervisors on board for a pilot test – There will be a fear that scores will decline and the supervisor will be blamed. Measure intensively but don’t evaluate individuals or supervisors – evaluate the alternative processes.
- Create a flexible solution space guiding how to say “no” for two or three of the most prevalent customer problems that cannot be easily rectified. Include the front line on developing both the substance of the response and how it is explained to the customer. Your best consultants are your CSRs.
- Develop metrics for success in terms of satisfaction, treated fairly, clear explanation, number of people told, escalations, and actual account retention (where appropriate). At one airline, we could track frequent flyer miles flown. At a credit card company, we could track spending. Also, ideally, create a simple entry in the customer log on whether the new or traditional approach to “no” was used.
- Conduct a quasi-controlled pilot test with one team using flexibility and one traditional procedure. Ideally, each team should handle at least 2,000 contacts using the flexible solution spaces and surveys should be sent to all customers. A short on-line survey should produce at least 300 responses for each team. Analysis should be overall as well as by type of issue for which the negative answer is given. If the negative responses are well crafted and trained, you should see at least a 10% increase in loyalty among those being told “no.”
 Making Delight Intentional, Call Center Pipeline, December 2021
 Little Things Mean a Lot, Quirks Market Research Journal, September 2021
 As Customer Problems Hit New High, Customer Seek Revenge, Wall Street Journal, March 7, 2023
 Paul Zak, The Neuroscience of Trust, Harvard Business Review, January 2017