If you had the only lemonade stand in town, you’d corner the market.

Alas, you probably don’t have a monopoly, whether selling lemonade, women’s clothing or automotive parts. Yet many entrepreneurs operate as if they are the only game in town. They dismiss competitors as irrelevant. It’s a certain path to failure.

Not only is it important to know competitors, but it’s also imperative to keep abreast of them. Rest assured, the successful ones keep tabs on you.

The most important benefit is that you’ll be able to distinguish yourself from them. Without differentiation, you’re merely another face in the crowd with no more reason for buyers to choose you than anyone else. Your best competitors distinguish themselves and carve a market niche all their own, leaving you with leftovers.

Know your competitors to know how you’re different, and then make your difference your advantage.

“None of us has anything really unique, so we must find ways to stand out from all the other cleaning services or whatever we are selling,” notes Bette Otte, a Southern California marketing consultant. “What makes you bigger, faster, stronger, taller than the competition? If you aren’t constantly vigilant … there’s no way to know.”

Consequently, you have no unique appeal or benefit to offer.

“The new guy in town sometimes gets business from people who are fed up with the old guy,” Otte says. This can lead to a shortsighted arrogance.

“That comes right before the fall. The competition is watching you. So, whatever you do that makes you successful, the competition is watching to improve upon it. Suddenly you’ll wonder, ‘Where did all the customers go?’.”

Otte says knowing your competition extends to those who don’t sell identical products and services. You may find you’re competing for discretionary dollars, not widget dollars. If you’re a travel agent, for instance, a competitor selling weekends at the local spa can cut into your bookings to Las Vegas.

Many entrepreneurs “for some reason think it’s negative to shop the competition, or to study what they do,” Otte says. In other cases, it’s simply a matter of inertia or laziness.

But successful companies constantly scope the competition, and respond accordingly.