The livewire German manager remains fully confident he can transform Liverpool's maddening inconsistency, but accepted that remains his toughest Merseyside battle.
Nathan Ake dispossessed goalkeeper Adam Bogdan for Watford's opener before Odion Ighalo grabbed a brace to condemn the Reds to four matches without victory.
Klopp insisted Liverpool can still scale the heights of the recent 4-1 raid at Manchester City and 6-1 hammering of Southampton more often than plumbing the depths of defeat.
"I know how strong this team can be and it's my job to help them show it much more often than we have," said Klopp.
"We came here to do something really different from what you saw.
"Between what we wanted to do and what everybody could see, there's a big gap.
"After Southampton everyone thought 'wow', and after Man City. But that's one part of what we can do.
"Today we saw the complete other side and maybe the truth is somewhere in the middle. It's not that bad."
Liverpool paid the price for a toothless first-half in which false number nine Roberto Firmino failed to add any bite to the visitors' attack at Vicarage Road.
Strikers Divock Origi and Christian Benteke were forced to watch on from the bench, though neither man could alter the outcome when pitched into action.
Klopp admitted he hopes this loss can in time be viewed as the low-point of his Anfield career, before defending his decision not to start Benteke.
"We lost our minds after the first goal, we lost our compact formation after the first goal, we didn't play easy when we should have," said Klopp.
"I would say hopefully it's the most disappointing moment in my whole Liverpool FC life.
"That's the next problem: if you lose the games everyone is allowed to ask why this player didn't play, when they wouldn't after you win.
"So okay maybe it was not the best decision, I don't know - we will never find out.
"But for today I decide first for Christian then for Divock, then for Christian. It's up to the players to change this."
Klopp then laughed off talk of Benteke joining Chelsea in January, by saying: "If there's the same probability in all the other transfer rumours I've heard since I've been here, then I'm pretty cool.
"All I've read until now was nil per cent, and I haven't heard about this."
Source: PA