Smith admits the Dragons were well off the pace at Rodney Parade, with a frustrating performance a far cry from their previous form at Rodney Parade so far this term. The Dragons had won five of their seven league games at the venue prior to the visit of Pat Lam and co, with Munster and Leinster the only sides to head home on a high, but they were second best to a Connacht side who leapfrogged them in the standings and bagged a try bonus point in the process in Newport.
"We don't want our good progress to peter out towards the end of the season," said Smith, who still hasn't given up hope of finishing as the second-best Welsh region behind the fourth-placed Ospreys.
"As a group we discussed that there is still a massive opportunity to catch the Scarlets. We need to finish strongly, starting on Saturday against Zebre. We need to take confidence into next season, we owe that to ourselves because we've made improvements and we've had a decent year.
"We want to be as high up the league as possible, we know we're not going to finish top of the regions after one season (under Jones) but if we can finish second it will be a huge boost for next year.
"There's still a lot to play for this season but this was a massive missed opportunity for us. We need to put things right."
Connacht raced into a 14-3 lead on Sunday and the Dragons were unable to find a way back in the same way that they had done against Glasgow in their previous home game a month ago.
They struggled at the setpiece until Jones changed his entire front row after half an hour and they never really looked like turning things around on the scoreboard despite a major improvement at scrum time in the final 50 minutes.
A high penalty count also cost the Dragons dear and Smith knows that a similarly sloppy showing could lead to more disappointment in Italy next week - and in the weeks and years that lie ahead - unless lessons are learnt in double quick time.
"Lyn has talked about his plan for the next few years and we're working towards that, but we can't let performances like that happen again," added Smith.
"It was frustrating that we didn't go out there and do what we were meant to do. It was very difficult to come back from 14-3 down at half-time, playing into a very strong wind. Our penalty count was too high which was frustrating and it meant we had to chase the game.
"We gave away too many cheap penalties which allowed them to put us under pressure. They shouldn't have had those line-outs and scrums in our own half to which led to the penalties but that's something that we'll look to put right this week."
Judgement Day returns... The Millennium Stadium is set for another double-derby extravaganza on Easter Sunday 2014 with the Cardiff Blues taking on the Scarlets at 2pm and Newport Gwent Dragons facing the Ospreys at 4.45pm. Tickets are available from wru.co.uk/tickets or from all four regions.