The Blue Ocean Eliminate-Reduce-Raise-Create (ERRC) Grid

During my studies at ThePowerMBA, I had the opportunity to revisit the main concepts of the Blue Ocean strategy, which offers several tools for companies that want to improve their unique value proposition, by differentiating their products from the competition.

One of these tools is the Eliminate-Reduce-Raise-Create (ERRC) Grid. It is a matrix that focuses on the different activities of the Four Actions Framework, as illustrated below.

The goal is to apply the four actions in order to create a product that is very different from the competition. This product may be cheaper than the competition (because it eliminates and reduces several costs), but at the same time it should offer something unique (because it raises and creates some relevant factors).

Below I will explain in detail how we have applied each one of  these four activities in my startup company KashKlik, and as a result we have created a very innovative product that is extremely different from the competition.

Example: KashKlik Influencer Marketing Platform

Eliminate:

  • Influencer Search: There are many platforms that enable the advertisers to search for influencers. On KashKlik, the advertisers cannot search for influencers. They simply create campaigns and define the targeting. Our algorithms automatically find the best influencers to promote each campaign.
  • Influencer Approval: On most platforms, the advertisers need to approve each influencer individually. On KashKlik, the advertisers do not need to approve the influencers. If the influencer satisfies the selection criteria that was defined in the campaign, then he/she can promote the campaign.
  • Negotiation with Influencer: In general influencers do not have fixed prices, and the advertisers need to negotiate with each influencer to define the amount to be paid for the promotion of the campaign. On KashKlik the advertisers do not need to negotiate with the influencers about the cost of the campaign. The advertiser pays a fixed value per-click to all the influencers promoting its campaign.
  • Post Approval: Many platforms require the advertisers to approve the contents of each post on the social networks. On KashKlik the advertisers do not need to approve individual posts. We trust the influencers based on the scores that were computed by our Machine Learning algorithms. The best influencers have higher scores.
  • Communication with Influencer: On other platforms, in order to negotiate payments and approve posts, the advertisers need to communicate directly with the influencers. On KashKlik there is no negotiation and no approval, so the advertisers do not need to communicate with the influencers.

Reduce:

  • Control Over Influencer Choice: On KashKlik, the advertisers have less control over the choice of influencers. The influencers are selected according to the targeting and profile requirements that are defined by the advertisers when the campaign is created.
  • Control Over the Contents of Posts: On KashKlik, the advertisers have less control over the influencers’ posts. The advertisers do provide examples of texts and images that may be used by the influencers to promote the campaign, but each influencer is free to use other contents that fit his/her audience.

Raise:

  • Campaign Management Efficiency: Because of all the features that were eliminated and replaced by automation, the KashKlik platform drastically reduces the amount of time and effort that the advertisers need to spend in order to create and manage their campaigns. Each campaign may start being promoted immediately after the advertiser has activated it. This is much more efficient than having to go over a process that requires direct communication between advertisers and influencers.
  • Audience Size Flexibility: KashKlik’s automation enables advertisers to work effectively with micro-influencers, who have audiences of less than 50 thousand followers. When there is no automation, it is not cost-effective to work with small influencers. Thus KashKlik provides more flexibility in the choice of audience sizes for each campaign.
  • Budget Size Flexibility: Thanks to KashKlik’s automation and the work with micro-influencers, it’s possible to create Influencer Marketing campaigns using budgets as low as a few hundred dollars. Traditional influencer marketing campaigns require budgets of tens of thousands of dollars. Thus KashKlik provides more flexibility in the choice of budget sizes for each campaign.
  • Machine Learning Application: There are several platforms that claim to use Machine Learning, but KashKlik raised the application of sophisticated algorithms to provide a new level of automation. KashKlik applies Machine Learning to create rich influencer profiles and to build an advanced Recommender System to match each campaign to the best influencers.
  • Scalability: Thanks to automation and the reduction in the time and effort required to promote the campaign, KashKlik makes it possible to promote a campaign using hundreds of micro-influencers simultaneously. Other platforms, that do not provide this level of automation, are not scalable.

Create:

  • Pay-Per-Click: KashKlik was a pioneer in the introduction of the Pay-Per-Click (PPC) model for Influencer Marketing. Most other platforms adopt the models of pay-per-post or pay-per-engagement. The adoption of PPC means in practice a very innovative combination of Influencer Marketing with Performance Marketing.
  • Influencers Choose Campaigns: KashKlik created a real marketplace that has inverted the relationship between advertisers and influencers. Instead of advertisers searching for influencers, on KashKlik the influencers search for campaigns.
  • Influencer Marketing for SMBs: Thanks to KashKlik’s reduction of the minimum budgets and the reduction of time and effort required to manage campaigns, the channel of Influencer Marketing became accessible to Small and Medium Businesses (SMBs). Previously, using traditional methods, which are very expensive and require lots of time and effort, SMBs could not afford to work with influencers.

As you can observe, as a result of the application of the four activities in the ERRC Grid, KashKlik has become one of the first Influencer Marketing platforms that addressed the SMBs market. In other words, we have created a Blue Ocean. I hope you have enjoyed this example. Please share your comments or questions below.

In a previous post I have shared a presentation and a video explaining how the application of these four activities have enabled KashKlik to create a new value curve that is very different from the competition.

In my next posts I intend to continue to share how the materials I’m learning at the ThePowerMBA can be directly applied to my startup company KashKlik. Please leave a comment if you would like me to address some specific topic. Thanks.

About Hayim Makabee

Veteran software developer, enthusiastic programmer, author of a book on Object-Oriented Programming, co-founder and CEO at KashKlik, an innovative Influencer Marketing platform.
This entry was posted in KashKlik, MBA, Startups, ThePowerMBA and tagged , , , . Bookmark the permalink.

3 Responses to The Blue Ocean Eliminate-Reduce-Raise-Create (ERRC) Grid

  1. ruthtz says:

    Hayim, very comprehensive and interesting use of the model. Good luck with Kashklick

  2. siddhartha says:

    Hayim, the ERRC framework is really well tabled here. I really appreciate the point on ‘C’ – novel value creation through raising marketing efficiencies and eliminating time consuming methods in influencer marketing. After all influencer marketing is just one part of a campaign. And if a marketing team spends disproportionate amount of time just in recruiting influencers for a campaign and then vetting their content…it makes it impossible to scale such a form of marketing. Its wasteful.
    The Kashklik model brings in a breath of fresh air with a new approach. I really appreciate the point on SMBs.

  3. Edouardo says:

    Very well tailored. Thank you.

Leave a Reply to Edouardo Cancel reply

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