Winger David Wheeler made it 2-0 following a defence-splitting solo run on the hour before Hawley converted Elliot Benyon's cross to make it 2-1 in the 74th minute.
Alan Gow put the result beyond doubt in the 85th minute, though, as he broke through the home defence before beating keeper Michael Poke with a clinical strike.
Knill said: "We are all disappointed with result but I thought we were pretty good, it's just goals that have cost us.
"I thought in the first half that was the best we have played. You just have to take your chances.
"Obviously Nichols hits a great shot and we go in 1-0 down at half-time. Even then you think 'don't panic, just keep doing the same thing'. I thought we did and then we go 2-0 down, so we had to change.
"We throw on another striker, get the goal and think 'here we go, we are going to make it a draw' and we get done with the third.
"It was a disappointing day but I have to say I still think there were a lot of plusses.
"Everybody looks at the result but I thought the performance and the attitude was pretty good from the players.
"When Karl missed the penalty I didn't think it affected us as a team, we just carried on doing what we were doing, moving the ball around the pitch and creating a lot of chances. You just get on with it.
"We came into this game with seven points from three matches and if we can take something at Plymouth on Wednesday it will still be a good month for us. We are going in the right direction."
- Sports & Recreation
- Karl Hawley
- Tom Nichols
- Elliot Benyon
- Michael Poke