Stuart Lancaster declared that England are making progress despite slumping to a series defeat following New Zealand's 28-27 victory at the Forsyth Barr Stadium.
The rivals produced three tries apiece in a breathtaking second Test in Dunedin but it was a devastating third-quarter spell that enabled the All Blacks to extend their triumphant run to 16 matches.
Ben Smith, Julian Savea and Ma'a Nonu crossed to establish a 28-13 lead after England had entered the interval 10-6 up, a scoreline which failed to fully reward their dominant first half.
Mike Brown darted over in the 72nd minute to offer hope of a fightback that quickly faded and Chris Ashton's injury-time try merely offered pride in defeat.
"We're disappointed to have come away with nothing having worked so hard. We put ourselves in a position to win after the first half," Lancaster said.
"We have high expectations on this tour and having lost the first game so narrowly we wanted to level the series and take it to a decider in Hamilton.
"But they are high-quality opposition and after another week together you could see the improved cohesion in their performance.
"There were one or two errors in our game which presented them with opportunities, but overall the positives far outweigh the negatives.
"Overall I felt the backline created a lot of opportunities as a group. The frustration for us is not finishing the opportunities.
"Scoring three tries in Dunedin is not a bad return so we are moving in the right direction but still, we didn't quite finish the deal.
"It's decision-making at the highest level that we need to look at and that's probably the next step we need to take with the team."
England were magnificent in the first half and established an early 10-0 lead through Marland Yarde's try and five points from Owen Farrell.
Yarde's pace and strength troubled the All Blacks, as did Billy Twelvetrees' distribution and vision, but the tourists' dominance was not reflected on the scoreboard.
And when New Zealand eased through the gears in a clinical 11-minute spell started when Twelvetrees gave the ball away, enabling the magnificent Smith to score, they had cantered out of sight.
"We were pushing the pace in the first half and in the second half the All Blacks showed why they're the world champions," defence coach Andy Farrell said.
"Their speed of thought and the speed at which they played the game was outstanding.
"Their core skills are excellent as well. That we got ourselves back into the game when we could have conceded a barrage of points says everything about us."
The experiment of playing Manu Tuilagi on the wing was unsuccessful on this occasion with the Leicester Tiger, who was tackled by Smith just short of the line after a 60-metre run, failing to make an impact.
When asked whether he would persevere with Tuilagi in the number 14 jersey, Lancaster said: "We'll wait and see really, we'll have to assess the game. We won't make the decision until Wednesday."
New Zealand head coach Steve Hansen celebrated an important series triumph over an England team he rates highly.
"We certainly played better than in the first Test but we needed to because England were a lot better too. It was a great Test match," Hansen said.
"The ball was thrown around and everyone would have left satisfied with what they saw.
"Any series win is important for us. There's still another game to go and there's been nothing in it in the first two games.
"We're playing one of the best sides in the world and managing to come out on the right side of the result.
"We're learning about ourselves and about England, so that is useful information.
"England have always been a team we enjoy playing, particularly of late because they've been real contests. They're right up there."