Allister Coetzee believes South Africa are "heading in the right direction" after they came close to ending New Zealand's100 per cent record in this year's Rugby Championship.
The Springboks suffered a 25-24 defeat in Cape Town on Saturday, although the performance was a vast improvement after the humiliating 57-0 loss they suffered at the hands of the All Blacks last month.
They twice held the lead in the second half only to be pegged back by the world champions, with a converted try from Malcolm Marx in the closing stages leaving South Africa agonisingly short at the final whistle.
"I feel sorry for the players. They played their hearts out there and we just came up two points short. It is disappointing," an upbeat Coetzee told the media.
"Our performances this season have showed that our processes are on track. We just needed two points. We are heading in the right direction.
"In both matches against Australia we were in it and could have won it, but did not. The 57-0 defeat in Albany was not going to define us.
"The players are enjoying playing for the Springboks. They have a massive work ethic.
"We can fix some things, like the scrum. But working for the mate next to you; that is something you cannot coach and that makes me so proud to see how they play for each other."
South Africa did not help their cause by conceding an intercept score to Rieko Ioane, while a positive display in defeat was soured at the end by the late dismissal of Damian de Allende for an elbow.
"We had them under pressure at times, but you cannot give the ball away against New Zealand," Coetzee added.
"We understand what we do when we do it. We kicked well, we only had one contestable that did not work out and in the end, we were two points short."
Coetzee will now switch his focus to South Africa's tour of Europe in November and December, when they play Tests against Ireland, France, Italy and Wales.