Continuing with their cup success of the previous season, Dick Graham's high-scoring side were entered into the Watney Cup, a pre-season tournament held between the two highest scoring teams in each of the four divisions in the Football League who had not achieved promotion or entered European football.

Colchester's goalscoring exploits of the previous campaign enabled qualification for the 1971–72 pre-season Watney Cup competition, open to the two highest scoring teams from each division, exclusively for teams that had not achieved promotion or entered into European competition.

Both Luton Town and Carlisle United were beaten at Layer Road ahead of the final, held against West Bromwich Albion at their Hawthorns stadium.

Albion missed two penalties, while Colchester youngster Phil Bloss scored the decisive spot kick to win the competition.

Although early favourites for promotion, a club debt of over £21,000 meant that manager Dick Graham needed to inject youth into his ageing side, bringing apprentices Steve Leslie, Steve Foley, Lindsay Smith, Micky Cook and John McLaughlin to name but a few into the first-team picture during the season.