Hmmm. First, I'd talk to the woman - find out if she wants help with this. I'm certainly not an expert on dealing with phobias, but I've had some reports of success with kids in classroom situations with the dogs. Parents have phoned me and told me that their kids have stopped screaming every time a dog comes near them after our visits. So, this is what happens - if any of it helps your lady, great.
First I have the kids sit in a circle with us in the middle, and I guarantee them that the dogs will not approach them. Then I tell them that "this" dog really likes kids, but "that" dog does not (the Designated Kid Hater changes with each visit, as both dogs really like kids). I say "she is afraid of kids, so she doesn't want you to pet her". Then we do some tricks and stuff, which includes some barking and a retrieve of me by the hand, so we can talk and they can see bite control in action. We get everybody laughing, and then the standard talk about not approaching dogs without a) asking the owner - if the owner says yes, then b) ask the dog - if the dog says yes, this is how you approach... and I show them how the dog says yes or no - ears, tail, body, face, mouth.
This is meant to show that the dog is an individual, that individuals have opinions, how to start reading those opinions, dogs can be fun but require respect.
Then I show them hand-targetting and cheek targetting (kisses), so they have a way of controlling what the dog does next (put the trainee in control of the situation ;*D ). They practise on each other.
Then I tell them that, as I said before, "that" dog doesn't want to talk to people, and that's OK, it's her opinion and we'll respect it. Similarly, some people don't want to talk to dogs, and that's OK too, their opinion and we'll respect it. So, if you want to talk to the dog that wants to talk to you, stay where you are. If you don't want to talk to the dog, just squiggle back out of the circle and the dog won't come near you.
Now we've respected the kids' opinions who are scared, instead of telling them they have nothing to be scared of and thereby belittling their feelings. AND we've given them a view of dogs they didn't have before, as individuals with opinions, and we've given them a start on "hearing" what the dog is "saying", including the idea that just because a dog is using its mouth or barking doesn't mean it is trying to kill somebody.
Then I start around the circle with the "friendly" dog. The kids are required to stay sitting, but they can pet the dog, or ask her to touch their hand or their cheek, and the scared kids are protected by their buddies. One more thing we do - as we approach the part of the circle protecting each scared kid, I ask the "friendly" dog to lie down - she has to meet and greet from the down position. Almost always, the scared kids reach through the bunch to touch the dog - sometimes a touch on the hip as they go on past, more usually a hand to target, once in a while an actual hug.
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