Definitely coup de grace time. You feel a ridiculously razor sharp knife at your throat that you just saw the guy sharpening for 30 seconds, and you lean back so he can get a good angle at your throat? Hell yeah, that's a CDG. Those razors are insanely sharp... I don't care how tough your neck is, they'll do massive damage. Yes, you can live, that's why you get a saving throw.... but most people die when their throats are cut.
Using it on PCs... I'd never actually let the CDG go through... it's way too unfair. I'd do something like you see in movies.. I'd ask what the person's spot, listen, and sense motive are, and make a few rolls, just to get the metagaming juices rolling, then do a little descriptive thing... you see an evil grin on the barber's face in the reflection of the knife as it descends on your throat, or you smell the acrid stench of poison on the blade, or *something* to justify why your character isn't face down in a puddle of blood.. because of the "fortuitous" forewarning, I'd just make it a very descriptive sneak attack, and everyone could talk about what a "close call" it was once the murderous barber is dead.
-The Souljourner