Yeah I am not very sure what is it that is wrong since I can't see what you have done. But generally, first take a look at your ROI, how much you are spending versus how much you are getting back for that amount spent. In your current case it would be negative as you have not made a sale.
What do you mean by the ads were very targeted? Is it very targeted because you used long tail key words?
At the same time, at which position did your ads appear on the google page during the search? If it was at #1 position, then it could be that most of your clicks were "curious surfers" and not buyers. A lot of times for Adwords, the #1 position is not the best because of this, so you may want to lower you bids to get you to maybe #2 or #3 position. This way the more chance your "clickers" will be real buyers than casual curious surfers.
Sorry if it sounds confusing, I tried to describe how I used to do it.