One of my favorite local bands broke up recently, and I was really devastated! They were a young group and played in a lot of clubs where young people go. The problem was that their music didn't fit with today's crowd. They sounded more like early Rolling Stones. I suppose if they had played to an older crowd, they would have been more successful. Sometimes you have to research the clubs and the type of crowds that frequent them.
I'm sorry to hear that the band broke up, even though I have most probably never heard them. It must be extremely hard for new music acts to make an impact in the market, given that popular music is so heavily controlled by big record labels.
You really do have to find a way to market to the right crowd. A good band manager should have an understanding of the target audience and how to get that audience to pay attention. It's unfortunate that so many bands fail.
The tough part about picking the right clubs is that it is often hard to turn down a gig. A friend of mine has a pretty good band, and they'll play almost anywhere if they don't have anything else booked. I think that's not the best idea, since it can hurt their momentum. It's hard to tell that to serious musicians though, they just want to play even if they only have a few fans watching.