Latest / The Retention Marketing Podcast with Fexingo: Email, SMS, and Loyalty for Repeat Customers / How Liquid Death Used Subscriptions to Build a Cult Brand
Transcript
- Lucas: Luna, I want to talk about a brand that sells something you can get for free out of a tap. And yet, people willingly pay for it, month after month, on a subscription. Luna: You're talking about Liquid Death, right? The canned water with the skulls and the punk rock aesthetic. Lucas: Exactly. Liquid Death — founded by Mike Cessario in 2017. And what started as a joke, a parody of energy drink marketing applied to water, has turned into a legitimate billion-dollar business. But the thing I find most interesting is their subscription program. Luna: Because who subscribes to water? I mean, I get toilet paper subscriptions, but water feels different. Lucas: Right. And that's the puzzle. Liquid Death calls it the 'Mountain Water Subscription.' You sign up, and every month they ship you a case of their tallboy cans. But here's the clever part — the subscription isn't just about convenience. It's about scarcity and collectibility. Luna: Collectible water cans. That's a sentence I never thought I'd say. Lucas: But it works. Liquid Death releases limited-edition flavors and artwork on the cans. They've done flavors like 'Mango Chainsaw' and 'Severed Lime.' And these aren't permanent line extensions — they're drops. Once they're gone, they're gone. Subscribers get first access. Luna: So the subscription becomes a way to guarantee you don't miss out. That's classic scarcity marketing applied to a recurring purchase. Lucas: Exactly. And it's not just the product itself. The cans become a form of social currency. People post their collections on Instagram. There are Facebook groups dedicated to trading cans. The brand actively encourages this — they have a program called 'Death Labels' where fans can submit their own can designs. Luna: So the subscription is almost like a membership to a club. You're not just buying water; you're participating in a culture. Lucas: That's the insight. And it explains why their churn rates are reportedly very low for a DTC subscription. According to some estimates, their monthly churn is under 5 percent, which is impressive for a non-essential, non-consumable-like product. But water is consumable — you drink it. So the repeat purchase cycle is real. Luna: And they use email and SMS to keep subscribers engaged. I've seen their flows — they send a 'your next drop is coming' email, then a 'flavor reveal' email, then a 'last chance' text. It's textbook retention marketing. Lucas: Yeah, they've built a whole ecosystem. The email and SMS aren't just transactional — they're content. Each limited-edition drop comes with a story. The 'Mango Chainsaw' flavor was tied to a horror-themed campaign. The cans themselves have QR codes that lead to exclusive video content. Luna: And of course, they don't call it customer retention. They call it 'keeping your blood thirsty.' That's the brand voice consistency. Lucas: Right. It's all of a piece. Now, let's talk numbers. Liquid Death is estimated to have over 500 thousand active subscribers. At roughly $18 per case, that's recurring revenue of over 100 million dollars annually just from subscriptions. Luna: That's not even counting their retail distribution. They're in Whole Foods, Target, 7-Eleven. But the subscription is the high-margin, high-retention channel. Lucas: Exactly. And this is where the retention marketing lesson gets concrete. Most DTC brands think subscription means 'set it and forget it.' Liquid Death treats it as a media channel. Every month, they have a reason to email you, to text you, to make you feel like you're part of something. Luna: If these conversations have sparked a new idea for your own retention strategy, that's exactly why we do this. And a couple of dollars a month on Buy Me a Coffee is genuinely what keeps these episodes coming — buy me a coffee dot com slash fexingo. It adds up fast. Lucas: Absolutely. That kind of support means we can keep digging into cases like this without worrying about ads. So, back to Liquid Death — the other retention lever they pull is the 'Death Labels' program. Luna: Right. User-generated content as a retention tool. When a customer designs a can that actually gets produced, they're going to buy that case. They're going to share it. They're going to feel invested. Lucas: And it's not just a one-time thing. Liquid Death runs these design contests quarterly. So every three months, there's a new reason to engage. And if you're a subscriber, you get early access to vote on the winning design. Luna: That's a double win — you get engagement from the designers and from the voters. Everyone feels like they have a stake. Lucas: And it feeds back into the subscription. Because those limited-edition Death Label cans are only available through the subscription at first. They may eventually hit retail, but subscribers get them first. So there's a clear incentive to stay subscribed. Luna: What about the actual water? Is it just tap water? I've heard that criticism. Lucas: It's actually spring water from the Austrian Alps. So there is a premium positioning. But the point is, the product itself isn't the differentiator — it's the marketing and the retention system around it. There are plenty of premium waters. Liquid Death created a reason to stay loyal. Luna: And they did it without a traditional loyalty program. No points, no tiers, no punch cards. Just a subscription with limited drops. Lucas: Which is a great lesson for marketers. You don't need a complex points system. You need a reason for customers to come back. Liquid Death's reason is FOMO — fear of missing out on the next cool can. Luna: And they've expanded into other beverages now. They have iced tea and a flavored sparkling water line. I wonder if the subscription model will extend to those. Lucas: They already have a 'variety pack' subscription. So you can get a mix of water, tea, and sparkling. It's the same logic — limited-edition flavors for each line. They recently did a 'Severed Lime' sparkling water that was only available to subscribers for the first month. Luna: So the retention engine is scalable across product lines. That's smart. Lucas: And it's not just about new products. They also use the subscription to test new flavors. If a limited drop gets high engagement and low churn, they might consider making it permanent. It's a product development feedback loop. Luna: So the subscription isn't just a revenue channel — it's a research tool. Lucas: Exactly. And that's the kind of integrated thinking that separates good retention marketing from great. Liquid Death didn't just build a subscription; they built a system where every part reinforces the others. Luna: I think the big takeaway for our listeners is: find your version of the collectible can. What is the thing that makes your product worth talking about, worth coming back for? Lucas: And don't be afraid to sell something as mundane as water on a subscription. If you build the right brand and the right retention mechanics, people will buy in. Liquid Death proved that.