Transactional Analysis
will open your eyes to the way people
communicate and connect!

By understanding yourself a little better you will learn how to communicate and connect with others! Transactional Analysis is a system which can allow this self understanding to happen and in so doing enrich your dealings with other people.

In any business, and network marketing is no exception, as a business owner it is imperative that your communication with your prospects, customers and business partners is open and effective and that a connection is made between you and the person you are dealing with.

Transactional Analysis may sound like some kind of "space age jargon" or "secret communication code", but believe me, it is based on years of research into human behavior and has become widely accepted as one of the most accessible theories of modern psychology.

Let me give you a bit of background about Transactional Analysis so you can put this into perspective. The following is a direct quote from Eric Berne's official website.

Transactional Analysis was founded by Dr Eric Berne born May 10, 1910 in Montreal, Quebec, Canada. He began his psychiatric residency at the Psychiatric clinic of Yale University School of Medicine. Before Dr Eric Berne first published his theories on Transactional Analysis, he spent years formulating the framework of this approach.

The key to this methodology was a transaction - the fundamental unit of social intercourse…..

The unit of social intercourse is called a transaction. If two or more people encounter each other…sooner or later one of them will speak, or give some other indication of acknowledging the presence of others. This is called transactional stimulus. Another person will then say or do something which is in some way related to the stimulus, and that is called the transactional response.

With this definition, Dr. Berne defined the basic unit of analysis. At its simplest level, Transactional Analysis is the method for studying interactions between individuals……

In addition to the analysis of the interactions between individuals, Transactional Analysis also involves the identification of the ego states behind each transaction. Berne defined an ego state as “a consistent pattern of feeling and experience directly related to a corresponding consistent pattern of behavior.”

Want to learn more about Transactional Analysis Theory?

Check out the overview of the book "Games People Play" by Eric Berne, M.D.

If you have a particular interest in this fascinating theory then this book is a "must read".  Click on the image above to order your copy today.

Simply understand this......

Don't get too bogged down in the background and detail of the human behaviour theory of Transactional Analysis, but simply understand this………

Transactional Analysis is a system which can:

  • Help you to better understand yourself
  • Enrich your communication with others
  • Establish a solid foundation for communication based on recognizing the behaviors of others
  • Assist you to respond to others in a way that will keep the lines of communication open and clear

Understanding EGO States

So how do we achieve these 4 key outcomes by applying the theory of Transactional Analysis to our day to day personal and business communication?

Well, the short answer is………we need to understand the corresponding theory of "EGO STATES."

As stated above, Dr Eric Berne in his research into human behaviour and communication defined an ego state as "a consistent pattern of feeling and experience directly related to a corresponding consistent pattern of behaviour."

So how does this all work, and what exactly is an "Ego State"?

Well, it is not about having an excessively high opinion of yourself, which is often how the word EGO is used. The word "ego" can conjure up visions of a super confident, totally over the top, self opinionated and egocentric individual. But that is not what we are referring to here!

The dictionary defines the word "ego" as "the self of an individual person", which is exactly what is being discussed here.

In Eric Berne's Theory of human behaviour he describes three ego states which can in fact be confirmed with observable behaviours. 

This is well documented in his hugely successful book Games People Play: The Basic Handbook of Transactional Analysis.


In Transactional Analysis each person is divided into three parts or EGO STATES.

Each ego state is represented in diagrammatic form by a separate circle and together makes up the whole person or complete personality.

It looks something like this.....................................

As described by Dr Eric Berne in his book Games People Play: The Basic Handbook of Transactional Analysis. each of the Transactional Analysis ego states is made up of a whole series of behaviour patterns which are accompanied by related feelings. Eric Berne defined these ego states as PARENT, ADULT and CHILD

These definitions do not mean what we generally understand them to mean as commonly used in the English language, however as we explore them in more detail you will see why Eric Berne named them as he did.

Let's take a more detailed look at each of the Transactional Analysis ego states - what exactly are they?

It is best if we explore them one by one. I'll start by giving you an explanation of each ego state and then show you how this is illustrated as part of the ego state diagram.

The ADULT Ego State - Learned behaviours

The ADULT ego state is that part of your personality which thinks logically and rationally. It is organized and analytical and concerned with gathering information. It approaches problem solving in a totally pragmatic way by adapting, estimating and computing information to arrive at a non-emotional decision based on logic.

Additionally, the ADULT ego state is our own personal computer "hard drive" - it stores incredible amounts of data which we can later use to solve problems and make decisions rationally.

The ADULT ego state is represented by the letter "A" in the diagram. It in no way relates to a person's age.

The PARENT Ego State - Observed behaviours

The PARENT ego state is that part of your personality which consists of patterns of thoughts, feelings, and behaviour patterns learned during the first 5 years of life. After 5 years of age these patterns, feelings and thoughts can be modified to some degree, but as we get older they seem to remain part of who we are and are much harder to change. These behaviour patterns are generally learned through observation of the important figures in our life like parents, grandparents, brothers, sisters, aunts, uncles, teachers and other important role models.

While growing up we observed these important role models doing and saying many things. Many of these patterns of behavior are copied by us as we grow and learn and they become part of our PARENT ego state without us even realizing that this is happening. They become part of our thinking and our personality and are recorded in our brain for future use.

Some of the behavioural patterns we learned from our parents are helpful, others are not. These patterns can surface during our dealings with other people. Some but not all of them can have a positive impact on our interactions with others.

Here are a few examples of behavioural patterns that we may have learned from our parents that are stored in the PARENT ego state:

  • Do's and Don'ts = "do this", "don't do that"
  • Rights and Wrongs = "that's right", "that's wrong"
  • Good and Bad = "that's good", "that's bad"
  • Attitudes and opinions
  • Our moral and ethical values and beliefs

There are 2 unique parts of the PARENT ego state. That is,

  • When a parent treats their children in a loving way, is protective, kind and nurturing. We call this "Nurturing" behaviour.
  • When a parent criticizes, makes rules, gives commands or punishes their children. We call this "Critical" behaviour.

Because as children we are exposed to both these types of behaviours over and over again, we unconsciously learn them and record them for the future. This means that our PARENT ego state also develops these 2 quite distinct aspects.

The CHILD Ego State - behaviours based on feelings

The CHILD ego state is that part of your personality which consists of stored feelings and emotions which are associated with specific external events.

Like the PARENT ego state experiences are recorded in this part of your personality starting from childbirth up to approximately 5 years of age. These recordings focus on emotions and feelings that are a direct result of something you experienced.

For example:

  • Feelings of fear associated with seeing someone get hurt of injured
  • Feelings of happiness associated with a family holiday
  • Feelings of humour associated with seeing a clown at the circus

CHILD EGO STATE - Two Unique Parts

The CHILD part of your personality perceives, thinks and feels as you did when you were a young child. It contains 2 unique parts of your CHILD ego state. That is,

  • All the impulses that came naturally to you as a child, and
  • All the patterns of behavior you learnt as a child as a direct result of your environment

Your NATURAL CHILD includes a range of emotions such as being:

  • Happy
  • Sad
  • Excited
  • Frustrated
  • Demanding
  • Etc………

Your ADAPTED CHILD acts as a result of things that happened in your environment. In other words, your ADAPTED CHILD developed when you learned to change your feelings and your behavior as a direct result of your experiences and your environment.

Your ADAPTED CHILD emerged as you learned how to live with other people like your family and your pre-school friends. It's about learning how to co-operate with others, share, take turns, be friendly and develop relationships and show concern for others. It's your ADAPTED CHILD that learns how to say "I'm sorry" and acknowledge your mistakes and also to know what needs to be done to get along with others.

Your ADAPTED CHILD includes being able to demonstrate the following:

  • Agreeing with others
  • Apologizing
  • A desire to get along with and please others

Understanding how you communicate is key to your success

Ok, so I hear you saying………"this is a very interesting psychology lesson but what does it have to do with me and my network marketing business success?"

Great question………I am glad you asked!

Understanding yourself is a key component to the success you have communicating with and understanding other people.

You see……… if you understand:

  • why you communicate the way you do
  • what experiences and influences have shaped who you are
  • what values and beliefs are important to you
  • what are the triggers that prompt you to respond to others in a particular way
  • what drives you and pushes your buttons

Then, you will gain huge insight into how this process works for other people.

When you really "get this" it changes the way you relate to others forever. It allows you to be much more empathetic and therefore maintain open communication each and every time you are engaged in an interaction of some kind with other people.

Keeping the lines of communication "OPEN" is the key to success in relationships of all kinds and that definitely includes business relationships. If you master the skill of applying Transactional Analysis through your recognition of ego states to your interactions with others, it will enrich your communication significantly and you will be on the road to personal and business success beyond your wildest dreams.

Does your communication with others help them feel heard, understood and valued?

At the core of understanding the significance of Transactional Analysis as a business communication tool is the realization that relating to people by acknowledging where they are at (in other words from what ego state are they speaking), means they feel heard, understood and valued! This will go a long way to helping you to build trust with your prospects, customers and business partners. Once trust is established the sky is the limit!

Unfortunately one of the things I see repeatedly in my work is "BLOCKED" communication. This is a "DEAD END" road I am afraid!

If you don't recognize the ego state from which a person is speaking and you therefore respond inappropriately, chances are you have lost the trust of that person and the interaction between you is about to hit a road block for sure!

You see, if you can't or don't acknowledge where people are at when you respond to them, they don't feel heard and understood and they have a perception that you don't think their feelings are valid. This instantly sets up road blocks and it is very hard to progress a conversation let alone bring it to an outcome that is win, win for both parties if this situation occurs.

This is NOT what you want in your personal relationships nor is it what you want or need to build a successful business.

Think about this for a moment………

I would hazard a guess that most people have experienced this situation………

Have you ever felt hugely frustrated when you are endeavoring to communicate with someone by really telling them why you feel passionately about something, only to find that you are getting that "blank stare"?

Then instead of getting a response that helps you to feel understood and valued, the person you are talking with seems to completely ignore what you have said and the associated feelings only to completely change the subject.

How does that make you feel?

I know it makes me feel completely rejected and not understood or valued. It certainly does not help me to trust that person, nor does it make me inclined to continue my conversation with them, let alone get into any kind of business transaction with them.

You see when this sort of scenario happens the transaction is "BLOCKED"! Blocked communication is going nowhere FAST!

An Example of BLOCKED communication

Let's take a look at a couple of examples, which will illustrate this point and which I am sure you can relate too.


Let's assume with the first example that a network marketing business owner is about to start a coaching session with one of their business partners. Is this transaction "OPEN or BLOCKED" and why?

Network Marketing coach: "Hello Jim" how are you today? It's great to see you and I am looking forward to our coaching session as I'm keen to see what you have been working on over the last week. Let's take a look at your coaching workbook and check out how you have gone with some of your results goals."

Person being coached: "well you know what, I'm sick of this whole coaching thing………I just can't get the time to work at it and do what needs to be done. My days are jam packed with things I need to get done in my work, family life and now I have all this extra work trying to get my business off the ground - how do you expect me to complete my coaching projects as well?"

Oops!!!!! I think this one is a tad blocked don't you? The lines of communication are definitely crossed here!


The network marketing coach has initiated the communication from his/her ADULT ego state. The comment is logical, organized and concerned with gathering information.

The network marketing coach has directed his/her comments towards the student's ADULT ego state and therefore expects a response that is also logical, pragmatic and non-emotional.

So how did the student respond?

Was the response from this transaction actually from the student's ADULT ego state?

I think the answer is pretty clear………it's a definite NO!

So when you look at the associated Transactional Analysis diagram you see that the transaction is BLOCKED.

The person being coached has responded from their CHILD ego state and has directed their comment to the PARENT ego state of their coach (in other words they are looking for support and empathy for their feelings of frustration).

The wires are well and truly crossed in this example as the initial transaction was directed from the coach's ADULT ego state to the student's ADULT ego state but the response came back from the CHILD ego state and was directed to the PARENT ego state.

This transaction can be salvaged however………

What would happen if this coach was pretty "switched on", and was well skilled in recognizing Transactional Analysis ego states? If that were the case the coach would recognize immediately that the student had some concerns that needed responding too before the conversation and indeed the coaching session could get back on track?

An Example of OPEN communication


Let's just look at how the student responded again just to refresh our memory. Then take a look at the subsequent response from the coach and how this transaction might look.

Person being coached: "well you know what, I'm sick of this whole coaching thing………I just can't get the time to work at it and do what needs to be done. My days are jam packed with things I need to get done in my work, family life and now I have all this extra work trying to get my business off the ground - how do you expect me to complete my coaching projects as well?"

Network marketing coach: "I am so sorry you feel that way Jim. It is great that you have told me that you are juggling a number of commitments and that adding your business coaching responsibilities to the mix is causing you some concern. I completely understand how you feel and I think we should change your coaching program to allow for your other commitments and make this more workable for you…….how does that sound?"


So, how does this second transaction look?

Pretty good to me………the transaction is OPEN - the lines are not crossed right!

How do you think the student now feels?

I would hazard a guess that this network marketing student feels heard, understood and valued. They got the nurturing response they were looking for. Now the interaction can proceed unimpeded by blocked communication and can move towards a win, win outcome for both parties.

I hope that these two examples have given you a snap shot of how applying Transactional Analysis to the real world of business communication can work. They are examples of how recognizing ego states can be applied effectively to help the communication process in your network marketing business.

There is a lot of great information available about Transactional Analysis and I for one am passionate about helping network marketers learn and develop this skill and then apply it to their business communication.

But, more on that later………

In Conclusion I would have to say.....

Understanding the theory of Transactional Analysis and building your skills to recognize and respond appropriately to the PARENT, ADULT and CHILD ego states requires commitment and practice. However, once you master it you will wonder how you ever got along without it and it will become a natural and integral part of your communication skills.

Transactional Analysis will open your eyes to the way people communicate and connect!

In your network marketing business you definitely want and need to connect with others.

Learn, practice and apply Transactional Analysis to your business and personal life and you will better understand yourself and enrich your communication with others.

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