In more detail
Tools such as Ahrefs, Semrush and Moz each publish a difficulty score, typically from 0 to 100. Most base it largely on the links pointing to the pages currently in the top results, sometimes combined with other factors. Because the inputs and formulas differ, the same keyword can score very differently in different tools.
Google doesn't publish a difficulty measure. Its Keyword Planner shows "competition" for advertising, which describes how many advertisers bid on a term, not how hard it is to rank organically. Confusing the two is common.
Difficulty scores miss a lot. They don't fully account for your own site's relevance and authority on the topic, the type of results Google shows (a results page full of big brands, forums or local listings behaves differently), or search intent. A "hard" keyword can be achievable for a site that is already an authority on the subject. An "easy" one may not be worth targeting if it doesn't lead to customers.
A practical approach is to look at the actual results page. Who ranks? Are they directly comparable to you? Could you produce something clearly better or more useful?
Why it matters when hiring an agency
Keyword difficulty is one of the reasons SEO costs differ so much between businesses. Competitive searches need more content, more authority and more time. Our guide to how much SEO costs explains how competition affects scope.
When an agency presents a keyword plan, ask how they've weighed difficulty against business value. A sensible plan mixes achievable long-tail searches that can produce results sooner with harder, high-value searches over a longer period. Be wary of plans that only target easy keywords, which can produce impressive ranking reports and few customers.