“Razor Blade Element”: Financial Expression of the Day

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Bankers and salespeople love a story with a razor blade element.

Razor blade element,” noun phrase, a term that describes the enviable position of a company that sells a product for which the customer will have to frequently purchase replacement parts.  Usage note:  An investment banker will often have to rely on his firm’s equity or debt sales force to sell a transaction (e.g., an IPO).  Despite how well educated many salespeople are, the i-banker thinks just about all of them are idiots incapable of doing his type of complicated work, that is, making pitchbooks with lots of colorful pie charts and tables, etc. 

So when the financier needs to use the sales force, he tries, no matter the topic, to craft a pitch for them that’s simple enough for a 9-year-old going door-to-door selling chocolate turtles for his soccer league.  If the client’s product line-up has a razor blade element to it (say, toner cartridges for printers), the banker breathes a sigh of relief because he knows that sales “guys” love to tell a razor blade story.

After a salesman has successfully used the razor blade story to get an order from his account (aka “custy,” a sickening bastardization of “customer”), he’ll make outrageous claims like, “Yeah, I beat him up until he gave me an order for 5 million.”  In reality, it’s pretty rare for the salesman, sounding like a savage beast while on the phone, to verbally beat up his customers.  As a matter of fact, if you were to walk by his desk mid-pitch, he’d probably sound more like a little lamb.

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