Despite enjoying long periods of possession and territory, Scotland came out on the wrong end of a hard-fought game at Murrayfield, tries from George Kruis and Jack Nowell settling the contest in England's favour.
Scotland have now not scored a try in their last six home matches against England in the Six Nations, who will hold the Calcutta Cup for another year.
Cotter told BBC Sport: "I thought we created opportunities [but] we didn't finish them off. We weren't accurate enough, there's a lot more to come from this team I think.
"Disappointed with the way they let those opportunities pass. It will be quickly identified and put the frustration behind us. We can't do much about this one but we're going to certainly look to the next one.
"We can do better than that, we know we can. Cut down a few basic errors, become more accurate, we start believing again. That game was there to be won. That's the hard cold fact of the situation."
Captain Greig Laidlaw, who converted three penalties, echoed his coach's sentiments, saying: "I don't think there was much between the teams.
"If you look at the second half there's probably momentum shifts where we've coughed up a few high balls, I think we lost about three of our line-outs.
"When we held the ball in the first half we were causing England problems and we were right in the game. It's disappointing for us because that's what we've been working on - concentration for 80 minutes.
"We made it easier for England in the second half. We created opportunities in the first half, it really is a simple game at times, if you lose the ball you make it hard for yourself."