To click relative to an image, you use the Mouse Click action, configure it to be relative to a found image, and take a screenshot of the desired area of the screen using Command-Control-Shift-4, and paste it into the image well on the action. The image has to be unique (which includes not being visible in the action if the image is small enough not to be shrunk in the image well) otherwise Keyboard Maestro will not know where to click. The Display option in the action will allow you to see where Keyboard Maestro is matching.
Note that you cannot “make the image a bit smaller” and expect it to work. The image size must exactly match the target size.
Also note that there appears to be some cases where a screen capture as described will capture a retina image but will use a DPI of 72,72 instead of 144,144 in which case the image will appear to Keyboard Maestro to be twice to large and thus not match.
Also note that matching text alone is often a challenge because the entire screen is covered in text and from an image matching perspective it all looks roughly like a similar blob of grey.